Crude Oil Forecast May 31, 2016, Technical Analysis

WTI Crude Oil

The WTI Crude Oil market went back and forth during the course of the session on Monday, but you have to keep in mind that the Americans were away at the Memorial Day holiday, and as a result liquidity would’ve been a significantly influential factor, so there isn’t too much to trade based upon Monday’s action. However, we do overall look very strong, and the $50 level above should continue to be at the very least psychologically significant. If we can break above the $50 level, the market then should continue to go much higher. Pullbacks at this point in time should be buying opportunities, and I believe that there is a significant amount of support at lower levels, including the $48 level, the $46 level, and the $43 level. The market should have more than enough buying pressure underneath to continue to push this market high enough to break higher than the psychological barrier.

 

Brent

The Monday session ended up forming a bit of a hammer, but the Memorial Day liquidity issues of course continue to plague the markets. If we can break above the shooting star from last week, I then feel that the market will try to grind its way towards the $54 level. That is the top of the resistance area that we are now trying to fight through, so I think that the next several moves in this market will be choppy to say the least, but given enough time I do think that we could break out. Pullbacks will more than likely be buying opportunities as it should represent value in a market that is very obviously bullish.

Selling isn’t even a thought, at least not until we get below the $44 level, something that doesn’t look very likely at this point in time. Pay attention to the US dollar, because the value of that currency could very well determine whether or not the oil markets go higher or lower. Because of all of this, we could have quite a bit of volatility, but given enough time we should build up enough momentum to go higher.