Technicals | Jul 16 2010
By Rudi Filapek-Vandyck
Market observers would have noticed how the US dollar had another headache session overnight, but crude oil prices could not benefit from it.
The above scenario fits in with the prediction by technical analysts at Barclays Capital that a downward sloping 60 days moving average is proving too much resistance for crude oil prices (regardless of ongoing USD weakness). The analysts thus predict that crude oil's further upside from here will be limited and instead a narrow, side-ways pattern should unfold next week.
The 60-day average is currently at US$77.75 for WTI and the analysts predict next week WTI crude oil futures are likely to remain capped in a range between US$74.25 and US$77.75/78.15.
For Brent, the 60-day average is currently at US$78.20 plus there is a trendline near US$77.35. Below US$75.00 would likely imply a test of US$73.75, state the analysts, but their preferred bias is for a short-term range between US$73.75 and US$77.70/78.20.
