The crude oil market continues to see a bit of support underneath, as there have been plenty of trade executed in this general area. The market will be noisy, but in the end, I think the buyers are forming a floor.
Taking a look at the four hour crude oil chart, you can see that the West Texas Intermediate crude oil market has rallied a bit during the Monday session. But keep in mind that it’s also Memorial Day in the United States, so there’s a lot of liquidity issues. So, I don’t read too much into the candlestick of the early hours in North America, but what I look into is the fact that we have found support at an area where we needed to find it in the form of roughly $77.
At this point, I think it’s likely that the market could go looking to the $80 level above. But with that being said, I do think that we’ve got a scenario where you have to be cautious and recognize that a lot of choppiness will be the norm. This time of year, is typically very bullish for crude oil, so I’m perfectly fine buying it, but I do recognize that it’s not necessarily going to be the easiest market to deal with.
Brent markets look very much the same. If we can break above the $83 level, then I think it brings in a rush where we try to get to $84.50. Short-term pullbacks continue to be buying opportunities as there will be a lot of demand for crude oil.
And of course, there are a lot of geopolitical concerns in the Middle East as per usual. With that being the case, I think it makes a lot of sense to be a buyer of dips and to not worry about shorting the market at all.
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Chris is a proprietary trader with more than 20 years of experience across various markets, including currencies, indices and commodities. As a senior analyst at FXEmpire since the website’s early days, he offers readers advanced market perspectives to navigate today’s financial landscape with confidence.