Crude oil markets fell during the trading session on Friday as we continue to see a lot of back-and-forth action. Economic numbers continue to underwhelm, and that of course has people worrying about whether or not there is going to be in demand for oil.
The WTI Crude Oil market rallied at the very beginning of the session, only to break down and form a very negative candle stick. We are currently in a major wedge pattern, so I think at this point we will continue to see a lot of noise but I think that the $50 level underneath offers massive support. If we were to break down below there, then it’s likely that we will go a little bit lower, perhaps down to the $45 handle. The alternate scenario is that we break above the massive downtrend line, which would give us an attempt towards the $55 level.
Brent markets broke down as well, testing the $60 level. I think at this point, there is an uptrend line underneath that will continue to hold this market up, but if we break down below there, it’s likely that we will continue to see longer-term negativity. Otherwise, if we turn around and break above the downtrend line, we could go to the $65 level, which is an area where I expect to see even more selling pressure. The market has been very negative overall, but it looks as if we are trying to form some type of bottoming, so we will have to see how much the buyers can influence the market. Expect a lot of volatility between now and the end of the year, and quite frankly I think range bound choppy trading will probably continue to be somewhat the norm.
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.