WTI crude oil has broken above the top of its descending triangle pattern to signal that an uptrend might follow. In particular, price could climb by roughly the same height as the chart formation, which spans $51 per barrel to $66 per barrel.

The 100 SMA is crossing above the 200 SMA to confirm that the path of least resistance is to the upside or that the climb is more likely to gain traction from here. Price is also trading above both moving averages, so these could hold as support moving forward.

However, RSI is already indicating overbought conditions and turning lower could reflect a return in selling pressure. Stochastic is also pointing down after recently hitting the overbought zone, so a pullback to the broken triangle top might still follow.

Crude oil popped higher on escalating tensions between the US and Iran as airstrikes are anticipated to cause disruptions in supply in the Middle East. Apart from that, the prospect of more sanctions on Iran could also limit the global supply of the commodity, which then lifts prices.

Meanwhile, inventory data from the US could determine where crude oil prices might be headed in the near-term. A large build in stockpiles could bring more downside pressure while a reduction could spur another leg higher.

Note that the Phase One of the US-China trade deal is expected to be signed by the middle of the month, keeping traders hopeful that some of the earlier sanctions could be lifted. This includes WTI crude oil, which has been part of China’s list of targeted items in retaliatory trade measures. Still, resurfacing tensions or falling odds that a deal will be struck could spur profit-taking from recent crude oil gains.