The WTI Crude Oil markets fell during the session on Thursday, as the US dollar continued to improve its value. With the ECB cutting interest rates, the US dollar of course expanded in value, and as a result of the oil markets fell as it took less of those dollars to buy the commodity. On top of that, the $96.00 level above continues to offer resistance, and as a result it’s difficult for this market to continue going higher, and therefore we fell back down to remain in the consolidation area that we have been in for some time.
The candle didn’t have much of a range though, so at the end of the day we don’t think that it was a statement on anything other than the fact that the market simply isn’t ready to make a decision yet. The market would have to break above the $96.00 level in order for us to feel comfortable buying, at least with any decent size position.
On top of that, we see the $92.50 level below has been rather supportive, so we need to break down well below that, and probably the $92.00 level in order to feel comfortable selling with any amount of size at this point in time. Because of that, we feel that the market is probably just waiting for today’s announcement.
Employment can give an idea of demand.
The employment numbers coming out of the United States today will give us an idea of whether or not the demand picture for crude oil is going to be higher or lower. After all, if the employment picture is picking up, then it stands to reason that more people will be driving, and more factories will be using oil for energy. At the end of the day, the market will try to anticipate what’s happening next, but we believe that we will continue to see a lot of volatility more than anything else. Short-term binary options might be the best way to play this market, as we will continue to bang around before making a solid decision. With a little bit of luck, today’s jobs report will give us more of an idea.
