The barrel of West Texas Intermediate came under a heavy selling pressure on Friday and lost nearly 2.5 % to drop to a 3-day low at $47.50.
Crude Oil has been a hard market to pin down lately due to the sharp rally within a Bear market. Naturally, the first thought would be that a natural disaster would boost commodity demand. However, Crude Oil is already over supplied and the upstream landscape is not affected by the storms. The downstream component of the Oil market, where demand occurs is the one in the path of storms on the horizon. Therefore, we could see a continuation of EIA Crude Oil inventory report numbers that encourage sellers to do what they do best, and buyers to hold off.
We have published in our forecast of last week that 49.60 is an important resistance for the short term trend change from Bearish to Bullish.
The possibility of completion of inverse head and shoulders pattern for a LONG trade entry is completely out of the scenario.
On the daily chart, we see that the bearish cypher pattern completed. Crude Oil closed the week below 47.77 Fibonacci Extension 50%. 46.80 is an important support.
According to Cypher Pattern modelling Fibonacci Retracement of %38.2 was supposed to be a support but this level ( 47.94 ) has been broken very fast. This indicates a strong bearish action.
47.04 and 46.50 are the next levels of this movement. There is an important support between 47.04 and 46.50. On daily chart 46.80 is the Fibonacci Retracement of 61.80% of the mid term price movement. Break below this level will carry the price towards 45.60.
45.60 is the ultimate support and below this level 44.60, 43.80 and 42.40 will be the targets.
Possible pull back level for Monday is 47.97.
Our stop loss for Short Trades is 49.60 as mentioned before.
You may enter a SHORT trade from the current level and you can use pullbacks towards 47.97 as a SELL opportunity.
Crude Oil has been a hard market to pin down lately due to the sharp rally within a Bear market. Naturally, the first thought would be that a natural disaster would boost commodity demand. However, Crude Oil is already over supplied and the upstream landscape is not affected by the storms. The downstream component of the Oil market, where demand occurs is the one in the path of storms on the horizon. Therefore, we could see a continuation of EIA Crude Oil inventory report numbers that encourage sellers to do what they do best, and buyers to hold off.
We have published in our forecast of last week that 49.60 is an important resistance for the short term trend change from Bearish to Bullish.
The possibility of completion of inverse head and shoulders pattern for a LONG trade entry is completely out of the scenario.
On the daily chart, we see that the bearish cypher pattern completed. Crude Oil closed the week below 47.77 Fibonacci Extension 50%. 46.80 is an important support.
According to Cypher Pattern modelling Fibonacci Retracement of %38.2 was supposed to be a support but this level ( 47.94 ) has been broken very fast. This indicates a strong bearish action.
47.04 and 46.50 are the next levels of this movement. There is an important support between 47.04 and 46.50. On daily chart 46.80 is the Fibonacci Retracement of 61.80% of the mid term price movement. Break below this level will carry the price towards 45.60.
45.60 is the ultimate support and below this level 44.60, 43.80 and 42.40 will be the targets.
Possible pull back level for Monday is 47.97.
Our stop loss for Short Trades is 49.60 as mentioned before.
You may enter a SHORT trade from the current level and you can use pullbacks towards 47.97 as a SELL opportunity.