Light Sweet Crude The light sweet crude market fell significantly during the course of the week, testing the $40 level. This is a massive support level
Light Sweet Crude
The light sweet crude market fell significantly during the course of the week, testing the $40 level. This is a massive support level based upon the fact that it is a large, round, psychologically significant number, and of course has caused a bit of a reaction from time to time in the market in the past. With this, we think that a bounce could be coming, but quite frankly we think that you need to sell rallies more than anything else. On the other hand, if you break down below the $40 level, you could see the players come back into this market and start selling again. Ultimately though, this is a freefall that has all the hallmarks of a market that is over exuberant in one particular direction. With that, a relief rally makes a lot of sense.
Brent
Brent markets look horrible as well, as the shooting star from last week at the $50 level suggests that the market is going to continue to go even lower. We closed at the very lows, just above the $45 handle. With that, we feel that selling is it only thing you can do, but you need to do in underneath the $45 handle. On the other hand, if we find some type of rally that shows a resistive candle, we are willing to sell as well. With no interest in buying this market yet, just simply because we have not seen a long-term buy-and-hold type of signal. We are going to need to see something like that, but do not anticipate seeing anytime soon.
Ultimately, the $42.50 level will probably be targeted going forward, and as a result we would aim for that on the breakout or the aforementioned failure after a rally. We believe that the $50 level will of course offer quite a bit of resistance, and as a result we would look for selling opportunities near that area with even more interest than most other areas. Pay attention to the US dollar, it has a massive effect on this market as well.
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.