Advertisement
Advertisement

Crude Oil forecast for the week of October 10, 2016, Technical Analysis

By:
Christopher Lewis
Updated: Oct 9, 2016, 07:21 UTC

WTI Crude Oil The WTI Crude Oil market rose during the course of the week, breaking above the $50 handle. This of course is a very bullish sign, but there

Crude Oil weekly chart,October 10, 2016

WTI Crude Oil

The WTI Crude Oil market rose during the course of the week, breaking above the $50 handle. This of course is a very bullish sign, but there is significant resistance just above at the $52 level, and with that being the case I would need to see this market break above there before I start buying from a longer-term perspective. If we pullback, I think that there’s plenty of support near the $48 level below, and of course the $46 level below that as well. Ultimately, this is a market that does look like it’s trying to break out, but at this point in time we still have quite a bit to chew through before we can actually do so. Once we do, I think that we will probably reach towards the $60 level next.

 

Brent

Brent markets rallied during the course of this past week, and as a result the $52 level looks very resistive. If we can break above there, I feel that the market will probably reach towards the $60 level, and then eventually the $68 level above that. At this point in time, it looks as if we could be messing around with building an inverse head and shoulders that has a neckline we are testing at this point in time. However, we could pullback but I think this point of support near the $40 level, and then the $45 level below there.

I have no interest in selling, at least not right now although I do think that longer-term structural issues will come back into play. After all, the proposed OPEC cut back is for only 750,000 barrels a day, when the market is overproducing by 2 million barrels a day. On top of that, it doesn’t even take effect until November, so really at this point in time this is the market perhaps overreacting a bit. Nonetheless, you certainly cannot fight the market, so at this point it looks like buying only is going to be the way to go.

Brent weekly chart,October 10, 2016
Brent weekly chart,October 10, 2016

 

Oil Weekly Fundamental Forecast

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.

Did you find this article useful?

Advertisement