As of now, it appears that the market is still attempting to determine which direction it will ultimately break as there is so much uncertainty out there.
- Throughout Tuesday’s trading session, the West Texas Intermediate Crude Oil market experienced a back-and-forth movement as it continues to consolidate.
- As we approach the top of the consolidation area, it’s reasonable to expect some hesitation in the market.
- Breaking above the $82.50 level and potentially surpassing the 200-Day EMA indicator could lead to substantial gains.
With the 50-Day EMA indicator offering some support from below, it’s likely that buyers will be found at this stage. However, if the market were to break down below this point, the crude oil market could fall to the $75 level, which is closer to the bottom. As of now, it appears that the market is still attempting to determine which direction it will ultimately break as there is so much uncertainty out there. It’s not only the crude oil market, but almost every market that I follow at the moment.
The Brent market is currently sitting just above the $85 level and the 50-Day EMA, with the 200-Day EMA located around the $89 level. This area represents the top of the overall consolidation area that the market has been in. The current situation is one where we are back-and-forth, attempting to determine whether there is enough momentum to drive significant movement. If we can break above the 200-Day EMA, it’s possible that the market could reach the $95 level. However, this level has seen significant selling pressure in the past and is a large, round, psychologically significant figure and a good headline for financial markets.
- It’s important to remember that crude oil is a vital component of the economy, and it’s not until we see the economic situation really take off that oil prices will follow suit.
- On the other hand, a strong economy is necessary to see strong oil pricing.
- In the current global growth situation, there are concerns that may limit the potential breakout of the market, even though supply concerns also exist.
Given these factors, it seems likely that any potential breakout may be somewhat limited. While crude oil is an essential resource, its pricing is also influenced by broader economic and geopolitical factors. Therefore, it’s important to pay close attention to global economic conditions and supply concerns when attempting to forecast the trajectory of crude oil prices.
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