- The Light Sweet Crude Oil market has shown itself to be a bit noisy, after initially gapping higher at the Thursday open.
- Ultimately, this is a market that I think will continue to be very much in focus for traders, as there are a lot of different pieces going on at the same time.
- This is a scenario where you would expect to see a lot of noise and volatility due to the fact that there are so many different things going on at the same time in the world.
Supply of crude oil is abundant at the moment, and while this is generally thought of as a negative thing, the reality is that we see the man possibly picking up, especially central banks around the world start to loosen monetary policy. With the recent inflation numbers coming in cooler than anticipated for the United States, it does suggest that perhaps the Federal Reserve might be closer to cutting rates than originally thought, and the idea is that loose monetary policy has traders betting on more economic demand for crude oil.
Technical Analysis
The technical analysis for this market is increasingly bullish every day, but it should also be noted that we are coming out of a very vicious downtrend. Because of this, I do think that there is going to be a lot of noise overall, and it’s likely that there will be plenty of pullbacks to choose from. I believe in the longer term we are going higher, but I also recognize that the $65 level is a massive potential support level, based on the fact that it was previous resistance.
If we do break higher from here, then we could go looking to the $72.50 level. The $72.50 level has been important in the past, so I would expect a little bit of market memory in this general vicinity to come to play, as traders start to look toward an even bigger break out. You should also keep in mind that we are currently near the 200 Day EMA, which of course is an indicator that a lot of people pay close attention to.
Ready to trade daily crude oil price analysis? We’ve shortlisted the best Forex Oil trading brokers in the industry for you.
Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.
