Crude Oil Forecast July 28, 2016, Technical Analysis

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Published: Jul 28, 2016, 04:48 UTC

WTI Crude Oil The WTI Crude L market initially rose during the day on Wednesday, but turned right back around just above the $43 level as we continue to

WTI Crude Oil

The WTI Crude L market initially rose during the day on Wednesday, but turned right back around just above the $43 level as we continue to see quite a bit of resistance and the Crude Oil Inventories numbers came out much weaker than anticipated as demand continues to dry up for petroleum. With this, it’s likely that the market will continue to see selling pressure every time we rally, and therefore that’s exactly how I am approaching this market: selling at short-term exhaustion point. Given enough time, it’s very likely that we will try to reach towards the $40 level, as oil continues to suffer due to not only to the strength in the US dollar, but the lack of demand and slowing down of economic activity worldwide. With this, it’s very likely that we continue to see this market offer selling opportunities.

Brent

Brent markets initially tried to rally during the course of the session, but turned right back around to form a very negative market. A break down below the bottom of the range very well could send this market down to the $42 level, and then possibly the $40 level below there. Rallies continue to offer selling opportunities on signs of exhaustion on short-term charts. With this, the market does look like it’s ready to accelerate and the downside given enough time, and the $46 level above appears to be the “ceiling” in this market. Because of this, it’s likely that the market will continue to offer plenty of selling opportunities if you are simply patient enough. This is a “sell and sell again” type of market going forward, especially if the US dollar continues to strengthen overall as the contract of course is priced in those US dollars. Brent is a bit more sensitive to the European Union and the United Kingdom, so having said that it’s likely that we will continue to see this market becomes even more soft as those economies are grinding to a bit of a halt. With this, I have no interest in buying this market at all.

Brent daily chart, July 28, 2016

About the Author

Christopher Lewisauthor

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.