Crude Oil Price - Feb. 13, 2013

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By: DailyForex.com

The WTI contract had a fairly bullish session on Tuesday as the momentum to the upside continued in this market. There a lot of different reasons why this market may be gaining, and as a result this makes a fairly bullish environment in which to start trading. After all, the more reasons you have to be long of an instrument, the better.

To begin with, you have the Federal Reserve and its seemingly endless amount of pump priming. With this means is that there are plenty of US dollars out there for the marketplace, and as a result it takes more of those Dollars to buy things, in this case crude oil. Because of this, the markets will naturally drift higher over time, and as a result over the last couple of years we have seen this market become comfortable with $90.00 a barrel as a standard price for oil. This was something that was basically impossible just five or six years ago.

$98.00 is the next hurdle

I see the $98.00 level as being the next hurdle, but it will be overcome given enough time. After all, we are in a bullish run and I see nothing changing that attitude in the markets. If we can get above the $98.00 level, I see absolutely nothing to stop this market from reaching the $100.00 a barrel level. At that point time, we have to start to ask questions of the longer-term trend in this market.

Crude Oil 21313

In the meantime, I believe that this market is bullish, but has a limited upside in short run. I also believe that the $100.00 level will be quite a bit more difficult to, as it has a much larger psychological significance the most traders out there. There are plenty of reasons that think that the market may or may not be able to continue, but one thing is for certain: the longer-term trend for the US dollar continues to be lower, which essentially by default will make the trend for this market higher. If this market pullback, I suggest that any of this pullbacks will simply be buying opportunities.

Christopher Lewis has been trading Forex for several years. He writes about Forex for many online publications, including his own site, aptly named The Trader Guy.