WTI Crude Oil Forecast: Struggles With the 200-Day EMA

• The West Texas Intermediate Crude Oil market has fallen just a bit during the trading session on Tuesday, as the 200-Day EMA continues to offer a little bit of trouble.
• At this point, the market is likely to see a lot of resistance, as the 200-Day EMA is such an important indicator.
• The 200-Day EMA indicator is relatively flat but is starting to drift a little bit lower. The dynamic ceiling in that area could cause you trouble if you are bullish.

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On the other hand, if we were to break above the top of the candlestick from the trading session on Monday, then it opens the possibility of a move to the $95 level. After that, we could be looking at the $100 level. On the other hand, if we continue to draw from here, then it’s likely that the 50-Day EMA could be a potential target, as it has a certain amount of interest around it. It had been much like a downtrend line previously, so now to be interesting to see how the market looks at it. I do believe at this point, it’s very likely that we continue to see a lot of noisy behavior, perhaps dropping down to the $80 level if we break through.

Volatility Ahead

I do think the crude oil has an interesting couple of weeks ahead of it, since the decisions to be made about its pricing are all over the place as we must worry about global demand dropping, and then of course the idea that OPEC has cut production. In other words, there’s a lot of volatility in both directions just waiting to happen.

 Ultimately, I think this is a market that will have to deal with making a bigger decision, but you could make a huge argument for the fact that the market is trying to form either some type of inverted head and shoulders, or a rounding bottom pattern. It’s a little early to make that decision, but at this point I think we’ve got a scenario where you must look at it through the prism of a potential turnaround. The $80 level underneath should be considered the “floor in the market” for the short term. The market seems to be awfully resilient these days.

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