- The West Texas Intermediate Crude Oil market is that the $70 level has been like a brick wall.
- This is interesting considering that the market had recently tried to bounce a bit, and the weekly candlestick looks at least somewhat promising.
- I think this sets up a potentially big move, and if we can recapture the $70 level on the daily chart, we may get a little bit of a relief rally.
On the other hand, when you look at the daily timeframe, it certainly looks like $70 is going to be difficult to overcome. In this environment, we could very well pull back down to the recent swing low near the $66.33 region, and anything below that would of course get a lot of selling going. In general, I do think that crude oil is trying to price in a lot of different things at the moment, and this will continue to cause major headaches.
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After all, the crude oil market is the life's blood of the economy, and if the economy is in fact starting to slow down or even fall apart, the demand for crude oil is going to drop. Recently, we've seen the Chinese demand fall off of a cliff, but it's also worth noting that the Chinese have been switching big rigs from crude oil to natural gas, so it may not tell the whole story.
Geopolitical concerns about the war in the Middle East widening seem to have subsided a bit and that of course helps the market as well. So, with all of this being the case, I think you've got a situation where crude oil is at least trying to form some type of bottoming pattern, but I don't know that it's quite ready to do so at this juncture. I think you probably continue to see a lot of choppy and noisy behavior, at least in the meantime.
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