Crude Oil Forecast January 23, 2017, Technical Analysis

Updated : Jan 21, 2017, 07:40 UTC2min read
Crude Oil daily chart, January 23, 2016
WTI Crude Oil The WTI Crude Oil market gapped higher at the open on Monday, as we continue to see quite a bit of volatility in this market. I still believe that there is a massive amount of resistance above, extending all the way to at least the $55 level.
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WTI Crude Oil

The WTI Crude Oil market gapped higher at the open on Monday, as we continue to see quite a bit of volatility in this market. I still believe that there is a massive amount of resistance above, extending all the way to at least the $55 level. I also recognize that the $50 level underneath should continue to offer quite a bit of support. Because of this, I believe that volatility and choppiness will continue. I’m going to wait until I see some type of exhaustive candle to start selling. If we do break above the $55 level, I believe that the market should go to the $60 level which I see as the longer-term “top” in this market. Ultimately, this is a market that is starting to see bearish inventory numbers, and with the strengthening US dollar I feel it’s only a matter of time before the sellers take over.

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Brent

Brent markets continue to bounce around the $55 level, and thus I think that we will continue to see quite a bit of shopping around in this market as well. The $57.50 level above should continue to be resistive, so I’m waiting to see whether we get an exhaustive candle. And exhaustive candle is reason enough to start selling, and push down to the $54 handle. If we can break down below there, the market should then drop down to the $50 handle. That’s an area where we will get a certain amount of support, so it will be difficult to break down below there. If we do, the market should continue to go all the way down to the $43 handle.

Ultimately, this is a market that will continue to see quite a bit of uncertainty, because the inventory numbers in America are rising, and the so is the US dollar, which of course both work against the value of the commodity. This is going to be a very difficult market to trade over the next several weeks, so you must be very quick and nimble to deal with the situation.

Brent daily chart, January 23, 2016
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