WTI Crude Oil Forecast: Continues to Cease Selling Pressure

Christopher Lewis

Global demand is questionable since we have seen so much in the way of concerns when it comes to slowing down.

  • The West Texas Intermediate Crude Oil market initially tried to rally on Thursday but gave back gain again as every time we rally it seems like people are jumping into push this market lower.
  • The $85 level seems to be a significant amount of resistance, which does make a certain amount of sense considering that it is a psychologically important figure, and of course we must worry about whether there is going to be global demand.
  • Global demand is questionable since we have seen so much in the way of concerns when it comes to slowing down.

After all we have seen a lot of tightening from monetary policy standpoint, and of course the fact that the markets must look at the US dollar is a wrecking ball comes into the picture as well. After all, you must keep in mind that crude oil is priced in that very same currency, so it takes less of those dollars to get a barrel of oil. Given enough time, I do think we have a situation where we break down through significant support, perhaps slicing through the $80 level and go much lower. Alternatively, this is a market that could turn around, but we would need to see the Federal Reserve and other central banks out there willing to get involved and loosen monetary policy.

Expecting a Significant Breakdown

I do not anticipate that they are going to do so anytime soon, so I think you have a situation where we are going to continue to see a lot of volatility more than anything else, so I’m looking for rallies to offer selling opportunities, at least in the meantime. I think it’s going to continue to be noisy, and you need to pay attention to the fact that we just ended up giving up gains for something like the 4th day in a row, so that probably says quite a bit. In this situation, I think you are simply looking for short-term moves that you can fade, as we are in such a tight range overall. Over the longer term, I do expect a significant breakdown, and a relatively deep dive over the next several weeks. A break above the $90 level of course would get my attention.

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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.

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