Break Coming in Crude?
- Cyclical analysis points to upcoming range break
- Multi-year median line channel continues to influence
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Crude continues to consolidate above a pitchfork line drawn from the 2013 and 2014 highs (currently at 58.80). We had hoped a clear break of this level would re-instill some upside momentum into the commodity, but so far that clearly has not been the case. This could soon change, however, as cyclical analysis suggests that oil is vulnerable to a breakout from the range over the next few days. The 62.56 high in May occurred during a key cycle turn window and it looks to be a pretty clear upside pivot for the market as traction above there would confirm that a more important push to the upside is indeed underway. A decline back under 58.80 would put the commodity on the back foot and raise the possibility of a downside break from the multi-week range, but only aggressive weakness under 57.50 would turn the technical picture outright negative.
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Crude Daily Chart: June 26, 2015
Charts Created using Marketscope – Prepared by Kristian Kerr
Key Event Risk in the Week Ahead:
LEVELS TO WATCH
Resistance: 61.80 (MTD high), 62.56 (May high)
Support: 58.80 (Andrews) 57.55 (May closing low)
Strategy: Buy Crude
Entry: Buy Crude if it settles above 62.56 over the next few days
Stop: Daily close below 61.80
--- Written by Kristian Kerr, Senior Currency Strategist for DailyFX.com
To contact Kristian, e-mail firstname.lastname@example.org. Follow me on Twitter at@KKerrFX.
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.