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Crude Oil Price Forecast – Crude Oil Continues to Look Vulnerable

By:
Christopher Lewis
Updated: Oct 27, 2020, 15:45 UTC

Crude oil markets continue to look very soft, as we had recently sold off drastically, only to form a less than impressive candlestick for the trading session.

Crude Oil Brent WTI

In this article:

WTI Crude Oil

The West Texas Intermediate Crude Oil market has tried to rally initially during the trading session but has given up a lot of the gains to show signs of exhaustion yet again. Ultimately, I think that the market is going to go down towards the bottom of the range that it has been in, which means that we could go as low as $36.25. That is an area that of course is important as it has been tested twice, but ultimately if we break down below there it opens up the possibility of a move down towards the $35 level.

Crude Oil Video 28.10.20

Brent

Brent markets also tried to rally but gave back the gains before the end of the day. Ultimately, the market is likely to find plenty of resistance above, near the $40 level, and then of course the 50 day EMA sits just above, and is sitting at the big figure, so that should be plenty of resistance. Ultimately, beyond that we have the 200 day EMA which causes major resistance as well. That being said though, the market is going to continue to move back and forth on the idea of stimulus and whether or not it is going to create more demand. At this point, it is difficult to see a scenario where we get out of the overall range.

If we do, then it will be like a “trapdoor opening” that could send this market much lower. Fading rallies continues to work as far as I can see, on short-term charts. As far as buying is concerned, I have no interest whatsoever.

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About the Author

Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.

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