The crude oil market initially fell during the course of the week but turned around to show signs of life as we are forming hammers. That being said, this is a market that I think is cyclically bullish this time of year, and therefore I think it’s probably only a matter of time before we rallied.
The crude oil market in the West Texas Intermediate Grade initially pulled back a bit during the trading sessions that made up the week, but the 50 week EMA seems to be offering support. It’s interesting because we are in the middle of one of the most bullish times of year, and therefore we have to keep in mind that there’s a cyclical trade going on as people travel more during this time of year.
Ultimately, if we can break above the $86 level, it could send this market much higher, perhaps to the $90 level, and that wouldn’t surprise me at all. In the meantime, I think every time we pull back, traders will be looking to pick up a little bit of value in this market as we have been forming a very long term bottoming pattern.
Brent, of course, looks very much the same as $85 has offered support. A breakout to the upside here could open up the $90 level, which of course is a large, round, psychologically significant figure. If we pull back from here, the $80 level could be a, significant support level as well.
But all things being equal, this is a market that I think we are trying to form some type of, rounding bottom maybe, but ultimately this is a market that should continue to find plenty of value hunters out there to take advantage of this setup. I have no interest in shorting either grade of crude oil.
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Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.