- The light sweet crude oil market initially pulled back just a bit to test the $62 level, a level that's been important for several weeks. If the market were to break down below there, then we could open up the possibility of a move all the way down to the $60 level.
- But I think right now we're basically in a range of support underneath that could continue to offer a floor in the markets at the moment.
All things being equal, if the market bounces up there like it did during the session, I think it shows that we are trying to hang on to the overall sideways action. And the candlestick from the Monday session may have hinted at this as it ended up being very neutral. If we break above the 50 day EMA, then we could go looking at the $65 level followed by the $66.77 region where the 200 day EMA currently resides.
Plenty of Problems with Oil
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Quite frankly, I think oil has got a lot of problems right now, but we are at such a low level that I think we are trying to find a very comfortable back and forth type of situation. Quite frankly, if you're a back and forth type of trader, this is the type of market you like. You've got a clearly defined $3 range, maybe $5 if we see a little bit more downward pressure, but it is worth noting that $62 has been like a massive floor in this market. Ultimately, I think we need to make a bigger decision, but with the United States, OPEC, and Russia all pumping out massive amounts of crude oil and a global economy that might be starting to struggle or wobble a bit, it does make sense that the upside is limited here, at least until something changes.
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