- The Light Sweet Crude oil market initially tried to rally during the trading session on Thursday but gave back gains rather quickly.
- There are a couple of different things going on during the trading session that might be weighing upon the crude oil market, but at the end of the day, the longer-term attitude of crude has been fairly negative to begin with.
- After all, the Russians, OPEC, in the United States are all pumping out oil as rapidly as they can, and that of course floods the market with supply.
That being said, we now have a potential peace agreement in Gaza, and that brings down some of the temperature in the Middle East, at least from an investment standpoint. The idea now is that crude oil can flow freely through the Middle East, or at least it should flow “free your than before”, and traders are looking at this as even more potential supply coming back on to the market. While I don’t necessarily think that matters, the other thing that does matter seems to be that the US dollar is strengthening, and it’s weighing upon the pricing power of crude oil as it obviously is priced in US dollars.
Technical Analysis
The technical analysis for this market is somewhat negative, but we are in the middle of a support zone that has been important between the $60 level in the bottom in the $62 level on the top. If we can break above the $62 level and sustain the move, we could go looking to the 50 Day EMA. If we can break above there, then the market is likely to go looking to the $65 level. On the other hand, if we were to break down below the $60 level, then it’s likely that the crude oil market goes looking to the $57.50 level, which is an area that we see a bit of a bounce from previously.
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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.
