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Crude Oil Markets Continue to See Resistance Above

By Christopher Lewis
Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.

Examining the longer-term charts reveals a critical support level at $68, suggesting that a bottoming process may be underway, making it an opportune market for buying on dips.

  • The crude oil markets displayed a rally in Friday's trading session, as they strive to break out in an upward direction.
  • This rally, however, is accompanied by various factors that could come into play simultaneously.
  • Also, it is worth noting that later in the day, we did in fact see sellers return.

Crude Oil Forecast Today -15/01: Oil Market Faces Resistance |Graph

WTI Crude Oil

In the case of West Texas Intermediate crude oil, it witnessed another rally on Friday, encountering significant resistance. The pressing question now is whether this upward trend can persist. If the daily closing price surpasses $75.50, it will likely signal a positive answer, prompting traders to aim for the 200-day EMA. Economic conditions play a pivotal role in this scenario, as the global economy's trajectory affects crude oil demand. Additionally, the current oversupply of oil complicates matters, although recent events in the Red Sea may hinder oil transportation to the market.

Given these circumstances, it's understandable that the situation appears somewhat perplexing. Examining the longer-term charts reveals a critical support level at $68, suggesting that a bottoming process may be underway, making it an opportune market for buying on dips. This is a market that is so close to a major bottom, that there will always be value hunters looking to get involved. The markets continue to base at this point, and therefore a positive outlook is to be had – but it could take a lot of time before we will truly took off.

Brent

The Brent market shares a similar pattern, as it approaches the crucial $80.50 level, briefly pulling back while challenging the 50-day EMA. A daily closing price above $81 could signify an eventual upward surge towards the 200-day EMA. Similar to WTI crude, Brent has substantial support at the $72 level, albeit slightly lower. This support creates a buffer, making it an appealing market for dip buyers. Nevertheless, holding onto gains proves to be challenging, indicating a back-and-forth market suitable for range-bound traders until momentum shifts towards the upside once more.

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At the end of the day, the crude oil markets are currently navigating a complex landscape with multiple factors influencing their direction. Economic conditions, oversupply concerns, and geopolitical events all contribute to the market's uncertainty. Nonetheless, the presence of critical support levels suggests the potential for buying opportunities on dips, although traders should remain vigilant in a market characterized by fluctuations and periodic reversals.

Ready to trade the WTI/USD exchange rate? Here’s a list of some of the best Oil trading platforms to check out. 

Christopher Lewis
About Christopher Lewis
Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.
 

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