Crude Oil Triggers Head and Shoulders Reversal Pattern

Crude oil prices are currently forming a head and shoulders reversal pattern on the short-term time frame, with the left shoulder and head formed during the sharp rally into late July.

The commodity has already pulled back sharply from its highs, slicing through the 100 SMA and 200 SMA in the process, which is a sign that the path of least resistance could be shifting to the downside.

Both moving averages are converging near current price, and a decisive close below them could reinforce the bearish bias suggested by the chart pattern.