The WTI Crude Oil markets fell during the session on Thursday, finding the $104 level to be a bit too resistive. It's not a cute surprise, I did suspect that would be the first barrier to overcome, and the fact that today is nonfarm payroll Friday doesn't exactly help the case for a longer-term move anyway. However, I do expect today to be important for this market overall. Nonetheless, I will not be trading it until Monday morning because of the potential importance of the day.
The world awaits what the Federal Reserve will do when it comes to quantitative easing. There is the possibility that they taper off relatively soon, but we know based upon comments from members of the board that they are paying close attention to the employment situation in the United States. Right now, that situation isn't exactly strong, so with that in mind it's easy to imagine how this announcement is going to be scrutinized by just about every trader in the world when it comes to the value of the US dollar.
It's all about the dollar, supply and demand doesn't really matter at this point.
In my opinion, it's all about the dollar at this point time and as a result the announcement and more importantly the reaction to it will be massively instrumental in the next move in this market. All things being equal, it does look like we're at the bottom of a larger consolidation area, and therefore I believe that we could see a move higher. In fact, I am fully expecting to see if we get a move above $104 for the daily close that we will head to $108, if not $110 over the course of the next couple of weeks.
If we do break down a little bit, I would fully expect to see the $100 level to be very supportive, if nothing else just simply because of the large round number psychologically significant aspect of it. If we did fall to that level and found support, I believe that buyers would step in there as well. Selling really isn't much of an option at this point as far as I can tell.
