Crude Oil Forecast August 20, 2015, Technical Analysis

Light Sweet Crude

The light sweet crude market fell hard during the session on Wednesday, testing the $41 level. Because of this, it appears that crude oil is going to continue to fall rather significantly. With that, we are short of this market yet again and we believe that $40 will be the next target. Ultimately, we believe that the market will find buyers sooner or later, but at this point in time it is obvious to us that there is no rush for the buyers to come back into this particular grade of crude oil. With this, we are sellers on breakdowns below the bottom of the range during the session on Wednesday, as well as rallies that struggle to hang onto gains, showing signs of exhaustion and resistance. We believe that the crude oil markets continue to struggle in the short-term, but sooner or later will provide some type of buying opportunity. We will have to find that a long-term charts though.

Brent

Brent markets fared a little bit better during the session, as although they were negative they did necessarily break down either. With this, the market looks as if it is simple going to consolidate with a negative bias more than anything else. With that being the case, we would sell rallies more than anything else at this point in time. Quite frankly some type of exhaustive candle would be a nice selling opportunity. We have no interest whatsoever in buying this market, as there has been far too much in the way of negativity placed upon it.

We believe that is only a matter time before sellers enter this market if we do rally, and that’s especially true considering that it now looks like the US dollar is getting ready to gain yet again. With that, we have no conviction to the upside at this point in time with the US dollar and demand both working against the value of this particular contract and commodities in general as so much uncertainty still plagues the marketplace is at the moment.