While a pullback to fill the gap may be imminent, the potential for a longer-term bottom to be formed in the market also exists.
- The recent announcement by OPEC+ to cut oil production by 1 million barrels per day has had a significant impact on the West Texas Intermediate Crude Oil and Brent markets.
- Both markets have gapped higher at the beginning of the week, but analysts are anticipating a potential pullback to fill the gap.
- This means that prices may retreat to the 50-day exponential moving average (EMA) support level, which could signal a negative trend for the market.
The WTI Crude Oil market is currently facing a significant resistance level at the 200-day EMA. While a pullback to fill the gap may be imminent, it is uncertain when this will happen. However, if prices do fall below the $75.19 level, this would be a bearish signal for the market. OPEC had few options but to cut oil production, given the slowing global economy and a lack of potential demand.
Similarly, the Brent market has gapped higher and broken above the previous uptrend line, but some gains have been given back. The 200-day EMA is the next significant resistance level, with the potential for a pullback to fill the gap. The 50-day EMA support level sits at $80.85, but the gap itself is just below the $80 level. If prices break above the 200-day EMA, it is possible that they could rise to the $90 level, and even potentially to the $100 level.
In general, the current situation in the oil markets is likely to be noisy, with a potential for pullbacks and volatility. This means that it is important to find value in the market and make informed decisions based on market trends and analysis. Traders and investors should keep a close eye on the 50-day and 200-day EMAs, as these levels could indicate potential support and resistance levels for the market. The market will have to reassess when we get there.
In conclusion, the recent OPEC+ announcement to cut oil production has had a significant impact on the WTI Crude Oil and Brent markets, with both markets gapping higher. While a pullback to fill the gap may be imminent, the potential for a longer-term bottom to be formed in the market also exists. As always, it is important to stay informed and make decisions based on market analysis and trends to find value in the market.
