WTI crude oil saw a late decline but still ended the day up by 89 cents, closing at $63.41. This marks the highest closing price since May 13. The market was affected by news about a US nuclear proposal to Iran, which led to some reduction in gains.

On examining the daily chart, there is speculation about an inverted head-and-shoulders pattern forming. If the neckline of this pattern breaks, the price target could reach $73. This potential pattern could indicate further movements in crude prices.

Price Action and Technical Interest

At present, price action in WTI crude is showing clear signs of technical interest. The late dip, sparked by hints of a nuclear proposal, suggests that political catalysts are still capable of muting otherwise bullish momentum. Nonetheless, a daily close just above $63 points towards firm underlying demand – not only for the commodity itself, but also for its directional options. Resistance during the session came in around levels not tested since mid-May, and it’s that memory of price–the return to a previous peak–that traders tend to respect.

Now, with some chatter about a possible inverse head-and-shoulders structure emerging on the daily timeframe, pattern-based speculation becomes louder. Such structures are often viewed as base formations during broad reversals, with the “neckline” representing a level that, once broken, can unleash a burst of buy-side volume. It’s hardly accidental that the neckline aligns with prior areas of congestion, reinforcing its place on the chart. We see a projected objective near $73 if the neckline does break cleanly, but it’s not purely about the target. It’s about recognising the manner in which price behaves around those technical junctures.

Looking ahead, immediate action should focus on volume confirmation and short-term support levels. Any retreat towards $61.50 must be watched for whether supply starts to gather pace, or if it’s just a shakeout designed to reset positioning. We remember that compressions in price often precede rapid expansions, and volatility around geopolitical headlines has a way of sharpening that turn.

Implied Volatility and Trader Sentiment

From our vantage point, implied volatility in crude options has begun to settle into a new range after a period of contraction. This suggests that premiums, particularly in the front-month contracts, may begin to rise again if speculative interest increases. Open interest should also be watched closely; growing open interest near resistance is a different story than fading volume into highs. We stay attentive to how price reacts to pullbacks – whether those are bought swiftly or ignored entirely.

Volume profiles and price footprints give context beyond clean candle patterns. It’s not just a matter of watching whether the neckline breaks – but how it breaks, and how swiftly other traders accept those levels. A slow-motion drift through resistance rarely holds. A sharp, high-volume surge often demands respect.

One must also consider positioning data. We’ve observed net long exposure creeping higher among managed money accounts. There’s been no unwind yet. Should price push towards $65 and hold, we could expect even more conviction in directional bets. For now, everything hinges upon how buyers respond around the neckline. It’s there that confidence wins – or falters.

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