Crude Oil Technical Outlook:
- WTI crude oil filled gap, long-term trend-lines could be next
- Brent crude oil won’t take much selling to get to 2016 trend-line
For an intermediate-term fundamental and technical viewpoint, see the Q4 Crude Oil Forecast.
WTI crude oil filled gap, long-term trend-lines could be next
A couple of weeks back WTI crude oil spiked in a big way on the Saudi oil attack, but that quickly gave way to selling as half of that gap was erased the day after the gap. Since then it’s been all downhill for oil, that looks set-up to continue.
The spike and reverse put in a nasty monthly reversal which should help keep the pressure on oil in the near-term. Short-term trend support from August was broken, now the trend-line from the December low is in focus as the next line of support.
A bounce may initially develop off the December trend-line, but the 50 level that put in a floor in June and August may not withstand another hold should it get tested again, which may finally bring into play the February 2016.
That of course might take some time to see, but the trading bias is generally tilted in favor of shorts at this juncture. The best course may be to wait for bounces and/or consolidation patterns to form before looking to join in on a move lower.
Check out the IG Client Sentiment page to see how changes in trader positioning can help signal the next price move in gold and other major markets and currencies.
WTI Crude Oil Daily Chart (50/2016 trend-line targeted)
Brent crude oil won’t take much selling to get to 2016 trend-line
Yesterday, Brent crude oil fully closed the Monday gap from two weeks ago, now looking to the trend-line from August as support. It may get some life at the short-term trend-line, but the 2016 trend-line looks like the next major target. The line is in approximate confluence the August low at 55.98.
Brent Crude Oil Daily Chart (2016 trend-line, August low)
Brent Crude Oil Chart by TradingView
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---Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX
