Crude oil markets were slightly positive during the trading session on Monday, but one would have to think that it is simply a slight bounce from major support, or perhaps even just a little bit of a “dead cat bounce.” It’s not that we can’t rally from here, and quite frankly I think that the market is mostly oversold, but I need this market to prove itself to me a bit more before I am willing to put a lot of money to work.
The WTI Crude Oil market has bounced slightly from the $62.50 level, an area that has been support more than once. Because of this, I think it’s only a matter time before traders will continue to make a major decision, because this area could be rather crucial. If we can bounce from here, I think the $65 level would be targeted next. If we break down, $60 seems like a good target.
Brent markets also are trying to find a bit of support near the $72.50 level, which I think it extends down to the $70 level. At this point, we have broken above the top of the previous candle stick, which is a bit of a “inverted hammer.” This is actually a bullish sign and I think we could see this market goes looking towards the $75 level next. A break above that level should send this market towards the $77.50 level as well. This market has gotten oversold by just about any metric you look at, so I think we are more than likely going to see a relief rally at the very least, if not much more than that. The $70 level should be rather stringent support, if nothing else because it is a large, round, psychologically significant figure.
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.