The WTI Crude market had a good showing on Friday as the bullishness in this market continued. The market rose during the session, mainly pushed along by weakness in the US dollar. As the market is priced in US dollars, it makes sense that we see more of them needed to buy this commodity.
The $94 level continues to act as resistance, although I believe that it is only a minor level in the end, as I see the more likely consolidation area over the longer-term to be between $90, and the $96 handle. The market likes to consolidate, and is very technical most of the time. There is a certain amount of geometry to it, and I see a lot of resistance at the $96 handle, meaning that the market will more than likely be attracted to it.
The downside sees a lot of noise below the $90 handle, and because of this, I think this area should offer enough support to keep the market higher. The candles that formed down at that level we hammers, which is of course bullish in and of itself. The move higher has been fairly strong, and as a result I am not surprised to see that the candle pulled back and formed something along the lines of a shooting star. Quite frankly, I think this market is about to offer a buying opportunity.
US Dollar and the Fed
The FMOC meeting on Tuesday and Wednesday this coming week could have an effect on this market. The meeting will present a statement that will give insight on how much longer the Fed is going to stimulate the economy. This could drive the value of the Dollar up or down, and this should have an effect on the oil markets.
I see enough support lower that I think that the market will have plenty of buyers below, and as a result I think that supportive candles can be bought. In fact, I would even be interested in buying on a short-term chart, as long as the supportive price action happens on a “whole number.” (Such as 93.00, 92.00, etc.)