WTI Crude Oil Showing Softness Yet Again - 7 August 2015

The WTI Crude Oil market continues to show weakness during the Thursday session as we broke down below the $45 barrier. Because of this, I think we are going to continue to sell off every time we rally and therefore I’m looking for short-term rallies to take advantage of as selling opportunities. I think that we will more than likely see a bit of volatility during the session today, but that is probably more due to the fact that the Nonfarm Payroll Announcement comes out and its effect on the US dollar than anything else.

I have no interest whatsoever in buying this contract as I see quite a bit of resistance near the $47 level above, and of course the $50 level above there. With this, I think that this market is one that you can return to again and again, taking advantage of perceived value in the US dollar every time we rally. I think that the US dollar strengthens, we will more than likely head directly to the $42 level as it was a massive bottom several months ago.

Lack of demand

There has been a serious lack of demand recently, and I do not see this changing anytime soon. With this, I think the only reason we bounced during the session on Thursday is people simply taking profits before the employment number. Remember, employment numbers affect everything as they can move the US dollar, but it can also move perception of what demand will be going forward.

Currently, I have absolutely no idea of when I could start buying this contract just that it would have to be based upon signals off of the longer-term charts such as the monthly chart. I think we are a long way away from a turnaround at this point, and more than likely will we will do is search for a bit of a basing pattern lower, and then eventually make that move. That can take several weeks if not months, so at this point in time it’s not even a thought.

Crude oil

Christopher Lewis

Christopher Lewis has been trading Forex for several years. He writes about Forex for many online publications, including his own site, aptly named The Trader Guy.