Crude oil markets bounced a bit during the week, testing down trend lines in both markets at one point. However, we are still very much in a downtrend so the question is whether we are trying to build up some type of base, or are we simply getting a bit of a bounce?
The WTI Crude Oil market bounced during the week but ran into trouble at the downtrend line that you see marked on the chart. Beyond that, we have the $50 level above that could probably cause quite a bit of resistance, so don’t be surprised at all if we get a pullback from here. If we can break above the $50 level, the market could go to higher levels, perhaps as high as $55 where we would see even more resistance. Because of this, I anticipate that we probably will get a little bit of a pullback, but we clearly have an area that if we break above, that would be a bullish turn of events.
Brent markets rallied as well, breaking into a downtrend line, but giving back some of the gains. Because of this, I think that the market will probably continue to struggle at the $60 handle as well, so I think what we are looking at is a short-term pullback. The question is whether or not the previous weekly candle at the $50 level and bouncing was a sign that we are trying to form a base? This is certainly something worth paying attention to, but right now I do not trust the move higher until we clear $60 on at least a daily time frame. I think that short-term pullbacks could be buying opportunities for those who are willing to put a stop loss just below the $50 level. However, if $50 gets broken to the downside, this market will go much lower. In
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.