May WTI Crude Futures Can't Break $65.00 - Forex News by FX Leaders
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May WTI Crude Futures Can’t Break $65.00

Posted Friday, April 12, 2019 by
Shain Vernier • 2 min read

Every now and then, the technical roadmap for a stock, currency, or commodity becomes obvious. For May WTI crude oil futures, the trend is bullish and $65.00 is the 10,000-pound elephant in the room. Bidders have challenged this level all week long, to no avail. Is $65.00 setting up to be a valid long-term top for WTI crude?

In short, no. Even though oil supplies grew by a large margin last week, the bears found only short-lived support. Bargain hunters are buying May WTI futures every time price penetrates $64.00 ― it appears to be only a matter of time before we see a hard breakout above $65.00.

On the fundamental front, the Baker Hughes Rig Count was released to the public earlier today. The count came in at 833, above last week’s 831 figure. Increasing rig counts come as no surprise, due to the uptick in oil pricing and the onset of the North American spring season.

$65.00 Is A Monster Level For May WTI Crude Oil Futures

Since Monday’s bullish break, May WTI crude oil has traded between $64.79 and $63.31. At this point, weekly settlement near $64.25 is a probable scenario.

May WTI Crude Oil Futures (CL), Daily Chart
May WTI Crude Oil Futures (CL), Daily Chart

There are two levels to watch in this market going into Monday’s trade:

  • Resistance(1): Psyche Level, $65.00
  • Support(1): 38% Current Wave Retracement, $62.27

Bottom Line: At this point, it appears that a major breakout is brewing for May WTI crude. In my view, a strong directional move north is likely if price rallies above $65.01. A ton of short position stops will be run in this area, producing at least an intraday bullish trend. Unless we see a failed auction and reversal immediately above $65.00, bullish price action to $67.50 is almost a certainty.

Right now, the bias is long-or-nothing toward May WTI crude oil. Buying dips (as in this trading plan), or scalping breaks (above this week’s high ($64.79) or $65.00) are ideal trades for Monday’s session.

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About the author

Shain Vernier // US Analyst
Shain Vernier has spent over 7 years in the market as a professional futures, options and forex trader. He holds a B.Sc. in Business Finance from the University of Montana. Shain's career includes stretches with several proprietary trading firms in addition to actively managing his own accounts. Before joining FX Leaders, he worked as a market analyst and financial writer.
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