- The crude oil market has fallen during the early hours on the Tuesday session, only to turn around and show signs of life. It’s worth noting that we are sitting just below the $62 level, which is an area that’s been important multiple times.
- In fact, the $62 level is the top of an overall support range that drops down to the $60 level. We did touch that $60 level, but now it looks like we are trying to reiterate that important. If we can break out to the upside, that would be an even more bullish sign, but I think over the next couple of sessions, we may see some problems.
Technical Analysis
The technical analysis for this market is obviously somewhat bearish over the last week or 2, but it’s also sideways over the last several weeks. All things being equal, if we bounce from here, I would look at the 50 Day EMA as a potential selling opportunity, at the first signs of exhaustion. This is also a market that has a lot of problems from a longer-term standpoint, because the top of the previous consolidation area being the $65 level is now starting to attract the attention of the 200 Day EMA.
Keep in mind that Russia, the United States, and OPEC are all producing massive amounts of oil, although OPEC it did announce a slower gain in drilling than anticipated, but really at this point in time that’s not as much of a factor as long as the US and Russia continue to flood the market with supply. Furthermore, we have to worry about the idea of whether or not the global economy starts to slow down. After all, if the global economy starts to slow down, then it’s likely that market participants will continue to look at oil demand as being very bearish, and that could send this market even lower. All things being equal, I am a somewhat negative of this market, but I don’t miss zero think we collapse either.
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