WTI Crude Oil
The West Texas Intermediate Crude Oil market embarked on an initial attempt to rally during Friday's trading session, pushing against the $80 threshold. However, this gain eventually receded, suggesting an imminent pullback. Beneath the surface, the presence of the 200-Day EMA is poised to extend a certain degree of support, drawing the attention of market participants. What strikes me as intriguing is the burgeoning convergence of the 50-Day EMA towards this region, potentially heralding the emergence of a "golden cross." This is an interesting indicator that a lot of people are going to be paying attention to.
The $80 level naturally commands significant attention, with numerous eyes closely monitoring its behavior. A break above the recent candlestick highs spanning several sessions could potentially pave the way for an ascent toward the $85 mark. Conversely, a breakdown beneath the lower boundaries of the nearby moving averages could usher in the prospect of a descent toward the $75 level. This is an area that I think would be massive for the markets, and anything below there opens the market to massive selling.
Brent
In a parallel development, Brent markets exhibited a nascent inclination to rally during the trading session, flirting with the $85 level before revealing signs of reservation. Like the WTI Crude Oil landscape, Brent's trajectory is characterized by the presence of the 200-Day EMA and the 50-Day EMA underneath. With all factors in equilibrium, market participants may demonstrate a degree of caution in adopting aggressive stances. However, it's important to acknowledge the varied crosscurrents influencing the scene.
The evolving chart patterns seemingly reflect the formation of a couple of inverted hammers, potentially implying an impending pause or a period of sideways movement. Overall, this market is attuned to the production cuts originating from Saudi Arabia, which has chosen to withhold 1 million barrels per day from the market. Should the $80 level be breached to the downside, it has the potential to unravel the entire market trajectory. Expect substantial volatility and maintain a judicious position size to navigate these undulating market currents.
Oil is likely to continue looking for the Saudi noise, as they are taking 1 million barrels a day off the markets. This allows for elevated prices in general, and the strong US dollar could be a counterbalance now.
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