- The West Texas Intermediate (WTI) Crude Oil market kicked off the week downward but quickly reversed, indicating signs of life. Currently, the market is consolidating within a relatively tight range, potentially gathering enough momentum for a larger move.
- A closer look at the chart reveals a situation where traders are trying to determine the next course of action, possibly forming a symmetrical triangle pattern.
- This pattern suggests that there is currently no clear winner in the market.
However, analyzing the longer-term charts reveals important levels of support and resistance. The $65 level below is a significant support level, while the $82.50 level is a strong resistance level. These price levels could define the summer trading range for WTI Crude Oil, as it is customary for this market to fall into a defined range during this season. Regardless, traders should expect choppiness and volatile price action in the coming period.
Looking at Brent (UK Oil), the market has displayed signs of both support and hesitation. However, it appears slightly weaker than the WTI market. Therefore, traders should closely monitor Brent before committing too much capital to the overall oil market. If Brent experiences a significant downturn, it might exert downward pressure on the WTI market as well. It's worth noting that the $70 level is a crucial support level for Brent. On the other hand, breaching the $77.50 level could increase buying pressure, potentially pressuring the widely followed 50-Day Exponential Moving Average (EMA). A breakthrough of the 50-Day EMA could then pave the way for a move towards the $80 level.
The market is Showing Signs of Uncertainty
Like WTI, it is likely that Brent is also trying to establish a summer trading range. This anticipated range could see $85 as the upper ceiling and the $70 level as the lower floor. Traders should prepare for increased volatility and unpredictable price movements throughout the summer. However, it is worth noting that the most significant price swings have likely already occurred. Consequently, the market is expected to exhibit many choppy back-and-forth actions in its general vicinity.
TL; DR: the WTI Crude Oil and Brent markets are currently consolidating and showing signs of uncertainty. While WTI displays slightly more resilience, Brent appears comparatively weaker. Traders should closely monitor key support and resistance levels and technical indicators such as the 50-Day EMA. As the summer progresses, expect increased volatility and unpredictable price behavior. By staying informed and adapting to changing market conditions, traders can navigate the challenges and opportunities these crude oil markets present.
Ready to trade our WTI Crude Oil Forex? We’ve made a list of the best Forex Oil trading platforms worth trading with.