In Friday's trading session, the West Texas Intermediate Crude Oil market rallied, threatening the 200-Day EMA. A breakthrough above this crucial level could trigger a larger upward move, possibly propelling the WTI market to the $80 level. However, it's worth noting that the market has been trading back and forth between the 200-Day EMA and the 50-Day EMA for some time. Consequently, traders may be cautious about making significant investments ahead of the weekend.
Support at the $75 level is anticipated, as the market has recognized its importance. A breakdown below this level could lead to a test of the 50-Day EMA. However, in the short term, a breakout from this range seems unlikely, considering the various crosswinds affecting the crude oil market.
Brent Crude Oil has also exhibited bullish behavior, hovering around the $80 level. This psychological level garners significant attention, similar to the WTI market. As with WTI, Brent is oscillating between the 50-Day EMA underneath and the 200-Day EMA above. A break above the 200-Day EMA could pave the way for Brent to approach the $85 level. The market continues to see a lot of volatility more than anything else.
- One crucial factor to closely observe is the global economy's apparent slowdown, which suggests that the price of oil may lack significant momentum.
- However, the recent OPEC production cuts have exerted upward pressure on oil markets.
- As these two opposing forces continue to influence the market, volatility is expected, contributing to the market's range-bound behavior.
- Given these uncertainties and the weekend, most traders may opt to wait for a clear breakout above or below the EMAs before committing to a trade in either direction.
In conclusion, the crude oil markets experienced a weekend rally, yet remain confined within the constraints of the EMAs. For WTI, breaking above the 200-Day EMA could trigger a notable upward move towards $80. Similarly, Brent's potential breakout above the 200-Day EMA might propel it towards the $85 level. Nevertheless, market participants must be cautious amid the global economic slowdown and the impact of OPEC production cuts. Volatility remains a prominent feature, making it prudent to stay range-bound for the time being. As traders evaluate these factors, a clear breakthrough above or below the EMAs could present an opportune moment to enter into trades with confidence.
Potential signal: Buying on dips continue to be a profitable position. I am jumping in and buying Brent (UK Oil) on a pullback to the $79.60 area. I would take profit at $81.00 above, and a stop loss at the $78.78 level.
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