Technical Analysis Crude Oil for November 18, 2015

Crude prices tested resistance during the Asian trading session on Tuesday but topped out at 42.01 and continued to move lower closing the NY session near 40.80. Geopolitics was the driver of Monday’s rally, as France stepped up its bombing campaign in Syria, though with a low probability of mid-east production being impacted, the market has returned to the fundamentals. Supply continues to outstrip demand, and as a result, all rallies will be faded quickly.  Wednesday’s EIA number will be the likely driver during Wednesday’s trade.

Crude prices are poised to test the November lows at 40.06 and then the next target would be the August lows at 37.75.  Momentum remains negative with the MACD (moving average convergence divergence) index printing in the red with a downward sloping trajectory. The RSI moved lower with price action reflecting accelerating negative momentum, while printing a reading of 36, which is on the lower end of the neutral range.