Crude Oil Weekly Technical Outlook For Sunday June 6th

Crude oil's break of 71.23 minor support last week suggests that recovery from 64.24 is already completed at 75.72 already. Initial bias is mildly on the downside this week for a test on 64.24 low first. Break there will confirm that whole decline for 87.15 has resumed and should target next key level at 60, which is close to 50% retracement of 33.2 to 87.15 at 60.18. On the upside, above 75.72 will bring another rise, but after all, upside should be limited by 61.8% retracement of 87.15 to 64.23 at 78.39 and bring fall resumption.

In the bigger picture, prior break of 68.59/69.50 support zone affirms our view that whole medium term rebound from 33.2 has completed at 87.15 already, just ahead of 50% retracement of 147.27 to 33.2 at 90.24. Further decline should be seen to 50% retracement of 33.2 to 87.15 at 60.18 at least. Also, as rebound from 33.2 is viewed as as a correction to the whole correction that started at 2008 at 147.27, we'd anticipate a break of 33.2 low in the longer term. On the upside, break of resistance at 78 level is needed to be indicate that fall from 87.15 is completed. Otherwise, we'll stay bearish.

In the long term picture, current development suggests that rebound from 33.2 is finished at 87.15, inside 76.77/90.24 fibo resistance zone as expected. Our view is that fall fro 87.15 would develop into the third falling leg of the whole correction from 147.27 and hence, we'd anticipate an eventual break of 33.2 low in the long term as such correction extends.....Nymex Crude Oil Continuous Contract 4 Hours Chart.

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