[ad_1]
I think we will have a lot of noise of the next couple of days before we make a relatively serious break in one direction or the other.
The West Texas Intermediate Crude Oil market has jumped quite significantly Monday as the trip to Saudi Arabia proved fruitless for Joe Biden. After all, there was always a potential concern that the Saudi government would start to pump more crude oil, but they essentially rebuked any overtures from the West.
Because of this, crude oil has seen a nice rally, getting over 4% for the session. The question now is whether or not we are going to start focusing on lack of supply, or lack of demand? If we are in fact heading into a recessionary environment, there will be a severe lack of demand for the commodity. If that’s the case, then we will obviously fall over the longer term.
From a technical analysis standpoint, we pierced the 200-day EMA a couple of sessions ago, only to bounce from there. This is a major indicator that a lot of people will pay close attention to, so it does make a certain amount of sense that we would have a bounce occur. At this point, now we have to start paying close attention to the previous trendline, because “market memory” should come into the picture to cause a little bit of resistance.
The 50-day EMA sits at the $110 level, which is just above that trendline. In other words, I think if we are going to break out to the upside, we have a lot of work to do. If that were to be the case, then the 50-day EMA being broken to the upside would be your first major sign that something is changing. There is a strong probability that we either find sellers just above and start falling again, or we simply go sideways as we are trying to figure out what happens next. A little bit of consolidation probably makes quite a bit of sense, so it does make for a reasonable expectation of sideways action.
If we were to continue seeing a lot of noisy behavior, then you will need to be cautious about your position size as it is a scenario where we would have a lot of difficult behavior to hang onto. Ultimately, I think we will have a lot of noise of the next couple of days before we make a relatively serious break in one direction or the other.
Ready to trade WTI Crude Oil FX? We’ve shortlisted the best Forex Oil trading brokers in the industry for you.
[ad_2]
Turkish 
English