Crude oil markets rallied again on Tuesday as we continue to see upward pressure in general. That being said, it’s worth noting that we are a little extended.
The West Texas Intermediate Crude Oil market has rallied a bit during the trading session on Tuesday as we continue to see significant upward pressure. Ultimately, this is a market that looks as if it’s getting used to the idea of being above $120, so I do think that it probably continues to go higher given enough time. At this point, pullbacks continue to offer buying opportunities in a market that clearly has much further to go. Because of this, I have no interest in shorting this market and I look at every dip as value to be taken advantage of. Ultimately, I see no reason why we don’t continue to go much higher.
Brent markets also look very bullish needless to say, as we are now threatening the recent highs at roughly $129. Because of this, I think it is more likely than not only a matter time before value hunters come back in with the idea of $120 being a bit of a floor. If we can break above the $130 level, then Brent has much further to go, and it could rip to the upside. Oil has been one of the better-performing trades as of late, and there’s nothing on this chart to suggest that it won’t continue to be.
Because of this, I like the idea of looking for value on dips that I take advantage of for bigger moves. Ultimately, it’s not until we break below the 50 Day EMA that I would consider this a market that might be in trouble. Granted, there does come demand destruction eventually, but we are nowhere near it.
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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.