Barclays Sees $64.35 as Oil ‘Swing’ Target: Technical Analysis

(Bloomberg) -- Crude oil is poised to rally to $74 a barrel in New York once it breaks through a “swing target” at $64.35, according to technical analysts at Barclays Capital. That price marks the completion of a rally in May that was equal in magnitude to a surge between February and early April, according to the London-based investment bank of Barclays Plc. Once $64.35 is reached, it will trigger further gains toward the 200-day moving average of the July crude contract, which is around $65.67 a barrel, the bank said.“There have been a lot of trades expressed to capture slowing global growth, such as shorting crude or copper,” Barclays analyst MacNeil Curry said in phone interview from New York. “As these positions go from short to flat and ultimately long, it will continue to take the market higher.”

Crude futures on the New York Mercantile Exchange last traded around $63.40 a barrel as of 11:28 a.m. London time, little changed after OPEC maintained output targets as analysts had forecast.“Ultimately we think we’re going to $74, $75,” Curry said. “If you look at financial markets, the 200-day average has been passed around asset classes from copper to Treasuries to the dollar for the first time since last year.”
Oil crossing the 200-day moving average for the July contract at around $65.67 a barrel would send a “buy” signal to investors outside the community of technical analysts because it is such a widely monitored measure, Curry added.Reaching this threshold will affirm that crude is set to complete an inverted “head-and-shoulders” formation that would take prices as high as $75 a barrel on the Nymex, Barclays said.