- The trading session on Friday witnessed an upswing in the West Texas Intermediate (WTI) Crude Oil market, as it aggressively approached the 50-Day Exponential Moving Average, situated around the $85 mark.
- This level presents a notable resistance, possibly acting as a short-term barrier for the market. A breakout above this point could set the stage for a rally towards the $90 level, a significant and previously established target, further amplified by its psychological importance.
- This is an area that I think the market will pay very close attention to.
On the downside, the 200-Day EMA is placed near $81 and is exhibiting an upward trend. This indicator is widely followed by long-term traders, and maintaining a position above this level would reinforce a bullish outlook. However, it is crucial to remain cognizant of geopolitical tensions, particularly from the Middle East, as they could inject volatility and uncertainty into the market. In other words, we are nowhere near being able to build up a position.
Turning our attention to Brent, the market exhibited initial signs of strength but subsequently retraced, indicating potential vulnerability. The market is caught in a flux, navigating between the 50-Day and 200-Day EMA, reflecting a period of indecision. Investors should remain attentive to the broader risk sentiment, as it holds significant sway over the Brent market.
Keep The Position Size Small
A breakdown below the $85 level could precipitate a rapid decline, though this scenario is speculative at this stage. Conversely, a push above the $90 level would convey a strong bullish signal, potentially propelling Brent towards the $95 level, or potentially even higher. The market's trajectory is expected to be heavily influenced by ongoing developments in the Israel-Gaza region, necessitating vigilance from traders.
In the end, both WTI Crude Oil and Brent markets find themselves at critical junctures, with future directions hinging on their ability to navigate key resistance and support levels, as well as their response to geopolitical events and global risk dynamics. Traders should remain alert and strategic in their decision-making to navigate this ridiculous situation the market is in. The latest headlines will continue to be a major influence on what we see here, so therefore the only thing that we can do is keep the position size small, so that you cannot have a major disaster happen.
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