Crude Oil Forecast: Markets Get Hammered Along with Risk Appetite – 16 March 2023
Given the current circumstances, there is no interest in buying this market until there is a significant turnaround, something that seems unlikely at this time.
During Wednesday’s trading session, the West Texas Intermediate Crude Oil market experienced a significant break, finally breaching a major support level that had held since December of last year.
As a result, the market has now dropped below the $70 barrier, indicating that sellers have taken control.
Looking ahead, I anticipate that the market will continue to fall and eventually reach the $65 level. Short-term rallies are likely to offer selling opportunities, and it’s important to consider “market memory” just above the $70 level. If signs of exhaustion appear in that area, it could be an opportune time to short the market. In the event that the market breaks below $65, the next significant level to watch would be $62.50.
Keep in mind that a strengthening US dollar can also come into the picture and work against the value of crude oil, and therefore it’s likely that we would see currency headwinds will continue to cause a lot of problems.
During Wednesday’s trading session, Brent markets attempted to rally, but were met with a “risk off trade” as Credit Suisse faced financial trouble, causing concern among traders about potential financial contagion.
As a result, the market reached a new low and breaking below the $75 level could lead to further drops to $72.50 and $70.
Anything below there could really send this market much lower.
Any potential rallies are likely to show signs of exhaustion near the previous support level around $77.50. Breaking above the $80 level would be necessary for a turnaround in the market, leading towards the 50-Day EMA. However, the current situation suggests that selling pressure and negativity will continue. The formation of a bearish candlestick indicates that sellers are more aggressive than buyers at this point.
After consolidating for three months, it appears that the market is now selling off similarly to last year. Given the current circumstances, there is no interest in buying this market until there is a significant turnaround, something that seems unlikely at this time. Because of this, I think you are going to see a lot of people running away from this market going forward, as a lot of people have been using that support level as a quick way to make money on each bounce.
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