The crude oil markets that I follow both look like they are trying to build a bit of a base, as we are bouncing around a major level of support going back three years. Because of this, volatility should continue to be a major issue in this sector.
The light sweet crude market has rallied a bit during the early hours on Monday, but at this point in time, the market is likely to continue to see a lot of questions asked about this scenario as we are close to the $67 level. The $67 level has been a major support level and therefore it’s likely that we will continue to see this area end up being a major area of interest due to the last three years as it’s been massive support.
The question now is whether or not we can continue to go higher. I think eventually we get a break higher, but you can see just how noisy it’s been. So if you are a short term trader, this is a nice range bound opportunity, as price goes back and forth.
The Brent market, of course, is likely to continue to see much of the same action, with $70 being a bit of a support level. The $70 level is a situation that has been support for three years over here as well and therefore I think it continues to matter. It’s really not until we break down below the $68 level that I would be concerned about Brent. And at that point, we could drop to the $65 level.
In the short term, I think you’ve got a situation where we are just simply bouncing back and forth, trying to find out whether or not we get enough momentum to go higher.
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Chris is a proprietary trader with more than 20 years of experience across various markets, including currencies, indices and commodities. As a senior analyst at FXEmpire since the website’s early days, he offers readers advanced market perspectives to navigate today’s financial landscape with confidence.