- Crude oil markets commenced the Thursday session with a positive trajectory, as they continue to find support near the 50-Day Exponential Moving Average in both varieties of crude oil under observation.
- Amidst these developments, there arises a significant focus on central banks across the globe, with questions surrounding potential shifts in monetary policies.
- Such shifts, if enacted, could potentially lead to increased energy demand.
WTI Crude Oil
The WTI crude oil market initially retraced slightly during Thursday's trading session, approaching the 50-day EMA before rebounding from the $75 level. The significance of the $75 level extends beyond its role as a prominent psychological marker, as it has previously witnessed market activity. In the event of a rally from the current levels, the market could set its sights on the $80 level. To emphasize this potential target, a horizontal line has been placed at the $80 mark. Conversely, a breakdown below the $75 level may expose the $72.50 level. The prevailing approach of buying on price declines remains consistent, reflecting a strategy that has persisted for several months. This pattern appears to be forming a gradual "rounded bottom." This is something that I have been following for some time. The markets are becoming more and more obvious as well when it comes to deciphering this.
Brent
The Brent crude oil market presents a similar scenario, with notable support in the vicinity of $80, or even $80.50. The support line has been adjusted to $80, although $80.50 remains a precise reference point. This range has previously transitioned from resistance to support. In the event of a rally from current levels, the 200-day EMA becomes a plausible target, with potential further upside to the $85 level. It is important to underline that there is a distinct reluctance to engage in shorting these markets. Instead, a prevailing sentiment suggests that both WTI and Brent crude oil are in the process of establishing a bottom. While this journey may not be devoid of challenges, the prevailing conviction is that buyers will ultimately prevail. Consequently, there is a belief that these markets will progress towards the $90 level over the ensuing months, possibly marked by a gradual and steady ascent. In other words, I am not looking for a huge or massive move in a short-term time frame.
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