The West Texas Intermediate (WTI) Crude Oil market experienced a minor rally during Tuesday's trading session. However, it is important to consider that it was Independence Day in the United States, resulting in limited electronic trading. Consequently, it is advisable not to attach excessive significance to the candlestick pattern observed. Nonetheless, the presence of the 50-Day Exponential Moving Average as a resistance level suggests that the market will likely encounter selling pressure if it remains below this threshold. Even in the event of a breakthrough above the 50-Day EMA, the next major obstacle lies at the $75 level, a significant psychological barrier that has previously served as resistance.
On the downside, the $67.50 level is a crucial support zone, extending to $65. This range provides a solid floor for the market, making a breakdown below these levels unlikely. The trading environment is currently characterized by a back-and-forth pattern as the market navigates various support and resistance levels.
Like WTI, Brent crude oil markets also displayed a rally, signaling an attempt to surpass the 50-Day EMA. If successful, the market could target the $80 level, which holds considerable psychological significance and is closely monitored by many market participants. Conversely, breaking below the low point of the Monday candlestick suggests a potential decline toward the $72 region, a significant support area. A further breakdown below this level opens the possibility of a move toward the $70 mark, which currently acts as the market floor.
Markets Are Currently Constrained
- Despite the recent bullish pressure, it is essential to note that the market remains range bound.
- The current upswing is partially novel, and the market appears to continue to struggle to maintain gains.
- Consequently, a tight consolidation phase prevails and could be considered a "summer range."
The WTI Crude Oil market witnessed a modest rally during holiday trading, with the 50-Day EMA acting as a resistance level. The $75 level is a key hurdle that could impede further upward movement. Conversely, the $67.50 support level provides a sturdy foundation for the market. Similarly, Brent crude oil markets exhibited a rally, targeting a breakthrough of the 50-Day EMA and potentially aiming for the $80 psychological level. On the downside, the $72 region represents significant support, with a potential decline toward $70 if breached. Overall, both markets are currently constrained within a narrow trading range, indicating a period of consolidation.
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