WTI Crude Oil Technical Analysis
The West Texas Intermediate Crude Oil market has initially tried to rally during the trading session on Friday but gave back gains rather quickly as we continue to see the $70 level offer a bit of a barrier. With that being said, the market is likely to test the bottom of the last couple of candlesticks, perhaps trying to break down to the $65 level.
The fact that we are testing the very bottom of the range and it seems like we are willing to sit there, it’s likely that we could continue to see a lot of negativity. On the other hand, if we were to turn around and break above the $70 level, then it’s likely that we could go to the $72.50 level.
Brent Crude Oil Technical Analysis
Brent initially tried to rally a bit during the trading session on Friday, but just like the WTI grade, found quite a bit of resistance and started selling off again. The $75 level has offered a barrier in this market, and as we have failed to break above there, it now looks like we could go racing towards the $70 level sooner rather than later. Ultimately, this is a play on just how fragile the global economy is, and how there will more likely than not be a significant lack of demand out there as economies grind to a halt.
Rallies at this point in time should be nice selling opportunities, and I will look in the oil markets for opportunities to short after signs of exhaustion when these rallies inevitably happen. That being said, if we break down below the $70 level in the Brent market, we may enter a new leg of negativity in this market that could really throw things around. It starts to look like this market is a sign that things are getting worse out there, and therefore oil will be like a punching bag for those who are running for cover.
For a look at all of today’s economic events, check out our economic calendar.
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