Crude Oil Forecast August 6, 2015, Technical Analysis
Light Sweet Crude
The light sweet crude market initially tried to rally during the course of the day on Wednesday, but struggled as we approached the $47 level. This area was previously supportive, so that of course makes sense that it is now resistive. With that, we turned back around to form a fairly negative candle, a shooting star sitting on top of the $45 level. Breaking down below that level would be a significant selling signal, and we would do just that. We have no interest in buying this market, but we do recognize the next day or so might be a little bit quiet as the Nonfarm Payroll numbers come out on Friday. Regardless, we have no interest whatsoever in buying this market, and look at every rally as a potential selling opportunity. The markets are very weak at the moment, and we don’t see that changing anytime soon.
The Brent market initially rallied during the course of the session on Wednesday as well, but in this case struggled at the $51 level. We went all the way down to the $49 level, and if we can break down below there we feel that the market will then head down towards the $45 level. This is a market that is very broken, and therefore we don’t have any interest whatsoever in buying this market. Every time we rally, it should be a selling opportunity given enough time. We believe that the $52 level will continue to be massively resistive, and at this point in time don’t really have any interest whatsoever in buying this market.
As long as US dollar remain strong, the Brent market will continue to struggle. On top of that, there isn’t much in the way of demand, which is an absolute killer of price. That should continue to be the way going forward, and therefore this could be one of the easier trades of the summer, simply selling this market every time it rallies as the markets simply do not look as if strength is coming anytime soon.