Crude Oil Forecast August 27, 2015, Technical Analysis

Light Sweet Crude

The light sweet crude market initially gapped higher at the open on Wednesday, but found the $40 level to be far too resistive. With that, looks like the market is going to continue to grind sideways overall and slammed back and forth. The $40 level is of course a large, round, psychologically significant number, so it does make sense that we would have sellers show up at that point in time.

Because of this, we are looking for short-term rallies in order to continue selling. We don’t have any interest in buying this market, at least not until we get well above the $43 handle. With this, we anticipate that the market will probably reach down towards the $38 level next, as the US dollar looks as if it is ready to bounce, which of course works against the value of commodities in general, especially one like crude oil that has almost no demand at the moment pushing it.

Brent

Brent markets tried to rally during the day as well, but struggled at the $44 level. The market simply went back and forth, but what we pay attention to the most serious that there is a shooting star from the Tuesday session that looks very soft. The $45 level was tested on Tuesday, which of course offered far too much in the way of selling pressure. The fact that we couldn’t get as high on Wednesday shows that the sellers are starting to assert their authority yet again. It’s only a matter time before he reach down towards the $40 level in our opinion, so therefore become we do get a short-term rally, we are sellers. We have no interest in buying this market at this point in time and believe that it is simply impossible to do as the downward pressure continues to overwhelm. We believe that $40 will of course attract a lot of attention as it is a large, round, psychologically significant number. At that point in time, we would anticipate a bit of a bounce, but we have no reason to think about going long at this point.