- The West Texas Intermediate Crude Oil market has rallied a bit, but at this point, it looks to me as if we are heading close to a major resistance region.
- The 200 Day EMA sits just above, so a lot of people are going to be paying close attention to this area.
- As we head into the weekend, it will be interesting to see whether or not the market participants are going to be willing to hang on to crude oil over the weekend.
It’s possible that we go higher, perhaps reaching to the $100 level, but at this point, it’s likely that the 50 Day EMA is going to go even lower. The $104 level is where it sits right now, and I do think that we are running much lower. Any sign of exhaustion will more likely than not be jumped on, especially as there are concerns about the global economy, as a slowdown will almost certainly drive down the value of crude oil because demand will fall.
The size of the candlestick is nice, and it does suggest that we have a little further to go. However, it’s where we close at the end of the day on Friday that will tell us more of the story. Even if we do rally from here, it’s really not until we break above the 50 Day EMA that you can start talking about the positivity of the market, because, for the most part, we are still in a very negative trend and channel. The US dollar strengthening of course will work against the value of crude oil as well most of the time, so you can pay close attention to that correlation also.
What’s interesting is that the natural gas storage numbers during the day came out higher than anticipated, suggesting that perhaps demand for energy is dropping. Because of this, it’ll be interesting to see how this plays out, but in the short term, it looks like the oil market is willing to ignore that. Natural gas has been outrageously expensive over the last several months, so that was part of the reason perhaps why oil has fought its way back up, but I think it’s probably only a matter of time before the short-sellers come back. I will be looking for signs of exhaustion to jump on.
Ready to trade WTI Crude Oil FX? We’ve shortlisted the best Forex Oil trading brokers in the industry for you.