Crude oil markets have been very volatile during the trading session on Wednesday, reaching towards the upside in a show strength again. With the falling US dollar, that should also continue to press this market to the upside.
The WTI Crude Oil market rallied during the trading session on Wednesday, reaching towards the $65 level above. That’s an area that has a certain amount of psychological resistance to it, but I think eventually we will break out to the upside, and what should be a very noisy move. Pullbacks should offer value, at least for the short-term traders, but longer-term there are a lot of concerns when it comes to the oil markets, because quite frankly these higher prices will attract American drillers. The markets are likely to see pullbacks as short-term value, unless of course we were to break down below the $63 level, which of course would show significant weakness.
Brent markets were very noisy during the day, as we bounced around the $70 level. It’s a large, round, psychologically significant number, so of course it attracts a lot of attention. If we can break out above the highs of the day, extensively the $70.50 level, the market should continue to go much higher. I think short-term pullback should be buying opportunities, with the $69.50 level offering an excellent opportunity for a bounce. Even if we break down below there, it’s likely that the market will find even more support near the $69 level. With this type of noise, it’s likely that we will continue to see a lot of short-term trading, but eventually if we break out to the upside, I believe that we will then go to the $72.50 handle, followed very quickly by the $75 level.
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.