WTI Crude Oil Forecast: Continue Testing Resistance - 10 December 2019

The West Texas Intermediate Crude Oil market initially fell during Monday trading as we got reports from OPEC that they were cutting 500,000 barrels per day. This is on top of the already 1.2 million barrels per day that OPEC as cut and started to extend, so at this point it’s likely that the market should continue to see a lot of back and forth due to the fact that we are at a structurally important level, and of course have to worry about the various macroeconomic issues out there.

The supply being cut of course is bullish for crude oil, but at the same time there are concerns about demand. After all, Chinese numbers came out rather weak over the weekend, and of course there are a lot of other concerns going forward such as the trade war. If the situation continues to deteriorate between the Americans and the Chinese, it’s likely that the demand for crude oil will continue to deteriorate as well. With that in mind, it’s likely that we will continue to see a lot of choppy trading as there are so many different crosswinds at the same time.

I believe that if we can break above the $60 level on a daily close, we probably make a run towards the $62.50 level above, which is resistance as well. I think it’s essentially the “zone of resistance” as we can find plenty of sellers in that general vicinity. Otherwise, if we break down below the hammer candlestick for the trading session on Monday, it’s likely that we will break down towards the 200 day EMA as it would turn that candlestick into a “hanging man.” I don’t necessarily think that it would be the beginning of a major breakdown, but it could be a return to the uptrend and channel that we have been in, and it’s likely that there will be plenty of interests underneath eventually, especially near the 50 day EMA which is closer to the bottom of the channel. That being said, I would anticipate that the crude oil markets will continue to be very noisy and it’s likely that the back-and-forth trading continues to cause a lot of short-term opportunities more than anything else. With this, I think that you can retain a little bit of a long buyers unless of course we break down below the candlestick from Monday which signifies we probably get a short-term pullback.

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.