Crude Oil Forecast August 7, 2015, Technical Analysis

Light Sweet Crude

The light sweet crude market fell again during the session on Thursday, clearing the $45 level to the downside. Because of this, we think that the market is going to continue down to the $42 level given enough time, which was a major low several months back. With this, we are sellers on short-term rallies that show signs of exhaustion, and of course a continuation of the move. With today being Nonfarm Payroll Number day, we could get the volatility needed in the US dollar to continue the move much lower. Any rally at this point in time will struggle at the $45 level, the $47 level, and then finally at the $50 level. In other words, we have no interest whatsoever in buying this market as it is simply far too negative at the moment.

Brent

Brent markets fell again during the course of the session on Thursday as well, testing the $49 level. This is basically a fresh, new, significant low here recently. And we believe that the market should then go down to the $45 level after that. Any rally at this point in time will more than likely find more than enough resistance, near the $52 handle. Truthfully, we think that the $50 level will also be massively resistive as well, so this point in time the Brent market should continue going lower. The US dollar of course greatly influenced of this market, and with Nonfarm Payroll coming out today, there is the possibility that volatility returned to the market. Any knee-jerk reaction should be looked at with suspicion, especially if it is to the upside. We will simply wait to see that happen, and then start placing our selling trades at that point in time. We feel that the market is probably heading to the $45 level next, and then possibly even lower than that. However, we are overdue for a bounce and therefore we are not ready to just jump in with both feet. Ultimately, we would need to see a long-term signal to start buying.