Crude Oil Forecast November 20, 2015, Technical Analysis

Light Sweet Crude

The light sweet crude market fell slightly during the course of the session on Thursday, as there is a significant amount of support at the $40 level. With this, the market could very well bounce, but at this point in time we believe that the market is one that you cannot buying. We like selling exhaustive rallies on short-term charts, as we recognize of the $42 level continues to be massively resistive. Once we break down below the $40 level though, we feel the market could very easily reach down towards the $39 level, and below there could break down rather significantly. We have no interest in buying this market as it looks very soft at the moment, and of course the US dollar is continuing to strengthen over the longer term. Although we pulled back during the course of the day on Thursday, we are very much in an uptrend when it comes to the US dollar, and that will continue to work against the value of crude oil.

Brent

The Brent market went back and forth during the course of the session on Thursday, suggesting that the market will continue to consolidate, but we believe at this point in time it is essentially going to see significant bearish pressure no matter what, and any bounce from here should just simply offer “value” in the US dollar, as that currency continues to be favored. On top of that, we have no interest in trying to buy commodities at the moment as there seems to be a very significant lack of demand.

Brent markets tend to be more akin to what’s happening in the European Union, and as a result it suggests that there is still a significant amount of concern in that part of the world. As the numbers continue to be soft, it’s hard to imagine that there is going to be a massive upsurge in demand for the Brent market. Ultimately, we believe that this market is reaching towards the $40 level over the longer term, but recognize that you may need to look to short-term charts in order to sell exhausted rallies.