Crude Oil Technical Analysis
The light sweet crude oil market is currently testing a significant resistance barrier as it looks like we are trying to do everything we can to get to the $70 level. That being said, the $66.50 level has been pretty difficult to overcome, and you can see more of the same is happening during the trading session on Tuesday.
The 50-day EMA is trying to cross above the 200-day EMA, but we are also watching for whether or not the Americans have a military attack against Iran and heading into the driving season in summer that typically picks up demand. In general, I think that is part of what we are seeing here, just trying to find the new range for the higher seasons.
Brent Markets and the Psychological Support Zone
Brent markets look very much the same as they are testing the $72 level and the $72.50 level, an area that I think is more or less a resistance zone. The $70 level underneath is a large, round, psychologically significant figure and an area that I think offers support, as it offered resistance previously.
We are getting ready to get the so-called golden cross with the 50-day EMA crossing above the 200-day EMA and given enough time I think we do go higher, but I do not expect an explosive move other than a US attack on Iran. If that happens, then yes, we probably get a move as we saw back in June.
That probably gets sold off as soon as they realize that the oil infrastructure has not been hit. Ultimately, I think this is probably best thought of as a buy on the dip and slow grind type of move waiting to happen.
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