WTI Crude Oil (US Oil)
The West Texas Intermediate (WTI) Crude Oil market experienced a slight bounce during Monday's trading session, demonstrating signs of life around the $70 level. Given the oversold conditions, some hesitation is expected in the market. However, if the market breaks below the low of Monday's candlestick, it is likely to decline towards the $65 level. The $65 level holds significant support, and a breakdown below it could lead to further downside momentum. Nonetheless, such a scenario is highly unlikely in the short term.
On the upside, if the market breaks above the high of Monday's candlestick, it opens up the possibility of reaching the $75 level, which is closer to the 50-Day Exponential Moving Average (EMA) that is currently declining. If the $75 level holds as a barrier, it could present a potential selling opportunity.
Brent (UK Oil)
The Brent Crude Oil market initially pulled back but then reversed to show signs of strength. Currently, the market appears to be hovering around the $75 level, while also keeping a close eye on the significant support level at $70. A breakdown below $70 would introduce substantial selling pressure and potentially push the market toward the $65 level.
Conversely, if the market breaks above the $77.50 level, there is a possibility of an upward move towards the 50-Day EMA, and even the $80 level. Overall, this market is likely to continue fluctuating based on risk appetite and prevailing market sentiment. It is important to note that a global recession is looming, which will likely weigh on energy demand across all sectors as industrial activity decreases. The global recession will eventually be the biggest factor, but there is also the US dollar, and whether or not it gets too strong.
Ultimately, the WTI Crude Oil market experienced a slight bounce near the $70 level, while Brent Crude Oil showed signs of life around $75. In the WTI market, a breakdown below the Monday session's low could lead to a decline toward $65, but such a scenario is unlikely in the short term. Breaking above the Monday session's high may open the door for a move toward $75. For Brent, the market's performance near the $70 and $77.50 levels will be crucial in determining its direction. However, the overarching concern is the imminent global recession, which will likely have a negative impact on energy demand.
Ready to trade our free trading signals? We’ve made a list of the top 10 forex brokers in the world for you to check out.