Light Sweet Crude The light sweet crude market fell during the course of the day on Wednesday, but found enough support at the $87 level to turn things
Light Sweet Crude
The light sweet crude market fell during the course of the day on Wednesday, but found enough support at the $87 level to turn things back around and form a hammer. By just about any measure that we use, we think that this market is oversold at this point in time, and anticipate any type of bounce from here to end up simply being a selling opportunity but necessary. After all, the market has been sold off rather aggressively, and the US dollar is falling in the short-term. The longer-term scenario of course is very negative, and we believe that there is a massive amount of resistance all the way to the $95 level. With that, we are looking for short-term bounces to offer selling opportunities as the downward pressure should continue in this marketplace going forward.
Brent
The Brent market fell as well, and just like the light sweet crude market, found support below to turn it around and form a nice-looking hammer. The hammer looks like it is trying to send the market back over the $92 level, and a move above there could send the market to $94, or possibly even as high as $97. It is at the $97 level that we think that we are going to see a significant amount of resistance, and as a result we believe that it is almost impossible to buy this market until we get above the $97 handle, so what we are simply going to do is sit on the sidelines and wait for this bounce to offer a nice selling opportunity from higher levels. We think that the market is heading to the $90 level given enough time, and as a result we are most certainly negative.
However, market simply cannot move in one direction forever. Is because of this we think a bounce is not only expected, but very healthy and a strong downtrend. Ultimately though, we think that it is almost impossible to buy this market and we have no interest in doing so at this point in time.
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.