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Crude Oil forecast for the week of May 30, 2016, Technical Analysis

By:
Christopher Lewis
Published: May 28, 2016, 04:51 UTC

WTI Crude Oil The WTI Crude Oil market had a very volatile week, but most importantly broke higher so still it appears that we are trying to continue to

Crude Oil weekly chart, May 30, 2016

WTI Crude Oil

The WTI Crude Oil market had a very volatile week, but most importantly broke higher so still it appears that we are trying to continue to the upside. The market will of course have quite a bit of psychological resistance at the $50 level, as it is a large, round, psychologically significant number. Ultimately, it looks as if we are going to break higher though, so at this point in time we are buyers of breakouts to the top of the range for the week. A break down below the bottom of the $44 handle would be a sell signal but it is not until we get that particular move that we would be willing to start selling. Because of this, it’s likely that the markets will mainly offer buying opportunities going forward, and if we do break above the $50 level, we believe that the next target will be the $54 level.

 

Brent

Brent market formed a fairly neutral candle during the course of the week, as the $50 level offered quite a bit of resistance. If we break above the top of the candle for the week, it’s likely that we will try to reach the $54 level. That area has been massively resistive in the past, so a break above there would be more or less an invitation to go much higher. It appears that the markets are trying to form a significant base, but it’s not until we get above the $54 level that we have broken free of massive resistance. Exhaustive candle in this area would be an excellent selling opportunity, but obviously we don’t have that quite yet. With that being the case, we are most certainly interested in the $50 region, and believe that it will dictate where this market goes over the foreseeable future. Because of this, we will be paying quite a bit of attention to this market and believe that the rest of the summer will be dictated by what happens in the next few candles on the weekly chart.

Brent weekly chart, May 30, 2016
Brent weekly chart, May 30, 2016

About the Author

Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.

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