Crude Oil Forecast: Looks for Support

In the scenario of a reversal and a breach beneath the 50-week EMA, the possibility of descending to the $80 level looms. 

• The West Texas Intermediate (WTI) Crude Oil market made an interesting start to the trading week with a noticeable gap, only to subsequently fill the void.
• This pattern hints at the market’s quest for support during dips, and it’s noteworthy that substantial support appears poised to come into play.
• Both the 200-day Exponential Moving Average (EMA) and the 50-day EMA indicator lie beneath the Friday candlestick.
• As such, the prevailing theme is one of solid support. Despite periodic retracements, it’s prudent to view these pullbacks as potential opportunities. However, a breach below the 50-day EMA could herald a more significant decline, potentially leading to the $75 level.

Turning our attention to Brent markets, a similar pattern emerges an initial upside gap followed by a subsequent retreat. The narrative here is complemented by the persistent influence of OPEC’s production cuts, complicating the supply dynamics. The sustainability of these production cuts appears poised to persist for the foreseeable future. A breach beyond the $85 level could fuel additional momentum, possibly unveiling the $87.50 level. Beyond this mark, the market opens to the prospect of aiming for the $90 level.

In the scenario of a reversal and a breach beneath the 50-week EMA, the possibility of descending to the $80 level looms. This mark carries significant psychological weight, coupled with the presence of options barriers. Hence, this range is likely to magnetize a cluster of buyers, underlining the shift from a narrative of demand scarcity to one of supply shortage. This shift appears to be enduring, and one could even make a case for a bullish flag formation in the broader context. On balance, considering the variables, it’s plausible to perceive this market as having the potential for upward movement over the course of time.

In conclusion, a nuanced view of the WTI Crude Oil and Brent markets unveils distinctive patterns. The WTI Crude Oil’s fluctuation hints at its search for support amid periodic retracements. The presence of key EMAs fortifies the landscape of support, while a breach below the 50-day EMA could signify a more substantial decline. Conversely, Brent markets display a similar gap-and-retreat pattern, buoyed by the continued influence of OPEC production cuts. A breach beyond certain levels could engender momentum, while a breakdown beneath the 50-week EMA carries implications for a potential descent to a key psychological and technical mark. The narrative’s evolution from demand to supply shortage is likely to persist, possibly forming a bullish flag.

Ready to trade WTI Crude Oil FX? We’ve shortlisted the best Forex Oil trading brokers in the industry for you.