- The West Texas Intermediate Crude Oil Market has shown itself to be very bullish at this point, although it is worth noting that we are at a very low level and therefore it probably is trying to stabilize itself more than anything else.
- If that is in fact going to be the case, then pay close attention to the $60 level, because I think the $60 level is an area that is trying to offer a bit of a floor.
- Breaking down below $60 opens up the possibility of a move down to the $56 level where we had bounced from.
At this point in time, I think you have to look at this through the prism of a market that just doesn't really know exactly what to do with itself because it is oversold. But at the same time, we have to start to think about the global ramifications of a trade war and what that will do to demand crude oil. Given enough time, I do think that's something that will come into play, but we also need to recognize the fact that this is a market that remains volatile and is trying to find its floor.
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The $65 level above will be a major issue. And if we could get above there, then yes, I think we could really start to take off to the upside. Perhaps testing the 50 day EMA as things stand right now, I think we're just going to go sideways. And that's not necessarily the worst outcome. Because you do want to see stability if and when you start to see the trend change a bit.
Again, I don't know that the trend is going to change right away, but I do recognize the reality is that traders are looking at the market and starting to feel a little better, but there's a lot of work to do there before we turn things around. It's only going to take an announcement or a tweet or something like that to send things into a freefall again.
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