WTI Crude Oil The WTI Crude Oil market initially fell during the day on Thursday, but did start to see a little bit of support near the $31 handle.
WTI Crude Oil
The WTI Crude Oil market initially fell during the day on Thursday, but did start to see a little bit of support near the $31 handle. Ultimately, it looks as if the market is trying to rally from here but quite frankly we do not like this market at all. We feel that any rally at this point is simply going to invite more selling pressure.
At this point in time, the $34 level above looks to be the “ceiling” of this market, and as a result we would be very surprised to see this market break above there. Even if it does, there is a resistance barrier all the way to the $36 level as far as we can see. Because of this, we would be sellers of exhausted candles above, as it would show a continuation of the downward pressure.
Brent
The Brent market formed a hammer based upon the $34 level, so it does look like it is trying to break to the upside. However, there so much in the way of resistance above that we are simply going to ignore that move, and wait for a sign that the Brent markets going lower again so we can start selling. We sell exhaustive candles above, and of course breakdowns below the bottom of the hammer that formed for the day.
Once we break down, it would not surprise us if the market reaches down to the $30 handle. That level should continue to be attractive to traders, but given enough time I feel that this market will not only reach $30, but break down below there and probably reached closer to the $25 level. In the meantime, it looks like short-term buying could occur but quite frankly it seems to be far too risky to join as there has been so much wealth destruction when it comes to crude oil markets. The supply continues to be much too strong for the demand, and as a result there’s no way that this market can hold onto gains for any real length of time in our opinion.
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.