Light Sweet Crude During the session on Wednesday, the light sweet crude market initially tried to rally, but found enough resistance at the $41.50 level
Light Sweet Crude
During the session on Wednesday, the light sweet crude market initially tried to rally, but found enough resistance at the $41.50 level to turn things around and put a significant amount of bearish pressure on the market. We ended up slamming into the $40 level, and as a result we feel that this market is eventually can break down and go below there. Once it does, the market should then reach towards the $39 level which has been massively supportive in the past. With this, the market will then reach towards the $35 level given enough time.
Alternately, we could rally and with that being the case we would start to look for resistive candles on short-term charts near the $42 level in order to start shorting this market yet again. The US dollar continues to strengthen overall, and as a result it’s difficult for the oil markets to show any real signs of longer-term strength.
Brent
Brent markets initially rallied on Wednesday as well, and then turned back around to form a bit of a shooting star. The $43.50 level is supportive, but ultimately we need to see a break down below the bottom of the Monday hammer in order to start selling. At that point in time, the market should then reach towards the $40 handle given enough time. It of course is a large, round, psychologically significant number, so it’s likely that it would be rather supportive. Nonetheless, we should break down below there given enough time.
All things being equal though, we preferred to look to short-term charts that show rallies that failed. Given enough time, we believe that you can sell and sell this market again, and at this point in time it’s almost impossible to imagine buying this market. We would have to see some type of longer-term signal on at least a weekly timeframe in order to become interested at this point in time. The US dollar will continue to work against the value of Brent, as well as a weakening European economy.
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.