Crude oil-where now?

First things first, front-month WTI has pushed back over, and held above, mild resistance at $74 and so has invalidated the potential ‘head and shoulders’ pattern on the hourly chart from yesterday. At the same time, crude has managed to rally off Monday’s multi-month low and the price action since then has helped to provide an uptick on the daily MACD. But despite these bullish indications, there’s still no suggestion that crude is about take off to the upside. Instead, sentiment feels as if it has been sapped by the near-relentless four week decline. Prices managed a respectable bounce yesterday. Crude picked up steadily throughout the day before turning lower just after the European close. At the time of writing, it was testing $74 as support. If this holds, then we could see a further pick-up in prices which should help boost upside momentum. But traders remain mindful of the downside pressures on the demand growth outlook, due to China’s economic problems and the probability of a slowdown across the US.