Crude Oil Price Forecasting for July 30, 2018.
It is the middle of peak driving season and Crude Oil has recently come off highs and there are expectations that the price may continue its bull run. Remember when refineries were closing and oil prices were in the 20s? Distant memory now. Supply crunches are expected, which higher prices are expected to be on the way. However, that is just what analysts projecting their opinions to the media think. However, interestingly enough, the exact opposite has been suggested by other analysts and it is considered a bit of a fringe opinion by corporate media sources. Why? Because lower oil prices are supposed to be good for consumers and positive news does not generate clicks and views for media conglomerates. The truth is that higher and lower oil prices have winners and losers, but it is a political football. Crude Oil Price Forecasting is complicated by politics, economic conditions, and weather conditions (North Atlantic Hurricane Season), but the charts have something to say before the height of unpredictability.
Crude Oil Price Forecasting on a Daily Chart
Price touched off a strong Supply Zone between $74 and $75 before taking a bit of a dip this month going below the 50 period Simple Moving Average and then teasing along this Moving Average. The Demand Zone at approximately $68 per barrel may be tested yet again. The resistance is far stronger with the Supply Zone simply because of the “round number” and the fact that it is a rather recent High for West Texas Intermediate.
MACD is still pointing downward, but there has not been enough momentum to push the price downward enough at least according to the indicator. The timing of a wick touch on July 27, 2018 with an uncertain flatness with the MACD points to a potential bullish change should the price exceed the Open on July 27, 2018 and respect the 50 period Simple Moving Average.
A 4 Hour Chart coincides with the same Supply Zone on the Daily Chart that includes the nearly 4 Year High. It is a zone that was tested three times and on the third test was finally rejected with enough of a price pushback that there is a fresh Supply Zone that starts at $70.58. The overall trend is slightly bearish on this chart and the prices are getting a bit cluttered in terms of recent pricing. There was open space for the price to fall off the nearly 4 Year Highs, but for the price to truly see further bearishness the price needs to fall below $67 per barrel.
On a 1 Hour Chart, there is going to be more noise than the previous charts, but it is a more responsive chart. The price rose above the 120 period Simple Moving Average on the last hour of trading on Friday. The price has been on a general downward movement during the end of last week. Is there an opportunity for upward movement? Yes, but the resistance may be felt once the price reaches $70, which is a psychological round number. Getting the price off $69 and even off the $70 handle will provide a good sense of direction. MACD is still pointing downward even though it seems at this point transitional. Any sort of bearish movement for Crude Oil may not happen immediately during Monday or Tuesday trading.
Takeaways for Crude Oil Forecasting for the Week of July 30 and the Month of August
There should be lighter volume considering the time of year, which is going to play a role in August. It does seem that the major movement to come will be in September 2018. Markets are pointing to a slightly bearish to flat environment and the $67 to $71 range is critical in determining the direction of the Light Sweet Crude. Going above $71 will provide an opportunity to test the highs and going below $67 provides an opportunity to bring the price down to the lower $60s per barrel.
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