- The crude oil market rallied a bit during the early hours on Friday, and then simply took off after Jerome Powell finally admitted that the Federal Reserve is likely to cut rates in a bit of a cycle.
- With that being said, the market also recently has seen the $72.50 level as a major support level and an area that I think continues to attract a lot of people.
- The stochastic oscillator is crossing underneath the oversold condition. So, it does suggest that we are going to go to the upside.
Pullbacks Could be Opportunities
With that, I think short-term pullbacks continue to be buying opportunities. It's likely that the West Texas intermediate crude oil market goes looking to the $79.50 level. That's basically where the 200 day EMA is hanging around. And therefore, I think you've got a situation where a lot of technical traders will be paying attention.
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The market is also going to have to deal with the fact that the overall demand picture is still a question as we have to wonder whether or not the markets are going to see enough demand. Is the economy slowing down? If it is, then we could get a situation where traders will look at this through the prism of perhaps a market that will maybe go sideways going forward or potentially break down, but it's really not until we break down below the $69 level that I would be concerned.
In general, I do think that eventually we try to sort things out, but right now it just looks like more chaos, which is all we've had in the markets as of late. I don’t see the oil market being any different than the other noisy markets that we have seen, and with this I am cautious about being “too big” in this market, as there are a lot of factors that will come into play when it comes to pricing the oil market
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