STRONG DOLLAR, WEAK DEMAND AND BIG SUPPLIES COMBINING TO CRUSH THE CRUDE OIL BULLS

Abundant supplies were strike one, but a strong greenback and weak IEA demand data are strikes two and three for the crude bulls. The charts say there could be even more downside for black gold. Crude oil futures have been under pressure for months now due to the world being “awash” in crude. Now, however, crude oil futures have the additional headwinds of a strong US Dollar and weakening demand. What do the charts tell us about the short and intermediate-term for crude oil? The technical take on crude… Crude appears to be in the latter part of a third wave move to the downside with two potential downside targets - $89.44 and $87.43 (for the October Crude Oil contracts). With crude at $92 and change currently, that's a lot of room to the downside for crude futures traders. From there, the technicians are calling for a modest upside correction which could take crude as high as $94 – although potential resistance starts all the way down at $90.70 (depending on how low crude falls first).