Crude Oil Price - Feb. 14, 2013

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By: DailyForex.com

The WTI crude market had a negative showing during the Wednesday session, pulling back after trying to breakout and above the $98.00 level. If you read the analysis from yesterday, you know that I had pointed out the $98.00 level as being potential trouble for the buyers and this seems to be exactly what has happened. However, I simply think that we remain within consolidation, between the $95 and $98 areas.

With this in mind, I think that a pullback should offer a buying opportunity at this point time, and will be treating it as such. I would be interested in buying a supportive candle closer to the $95.00 level than where we are right now. Alternately, a break above the $98.00 level would signal that momentum is picking back up and I would be forced to start buying at that point as well.

Within this chart though, I can definitely see how the $100.00 level will be a big barrier to cross. The buyers will certainly have their work cut out for them at that point time, and as a result I think the next couple of dollars could be rather choppy.

Federal Reserve

One of the biggest problems facing the sellers at this point is the fact that the Federal Reserve is pumping out so many Dollars. Since this contract is priced in dollars, the more devaluation that happens to the USD, the more things cost in that particular currency. This is exactly was happening in the oil markets, as it has the doubly bullish reason due to a pickup in industrial action as well. Simply put, not only is the Fed flooding the market with capital, we are also starting to see a little bit more industrial production and therefore industrial demand.

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That being said, the demand wouldn't justify this price in and of itself. Because of this, I think that there is only so far this rally can take this market, and because of this I think that this market will continue to be a short-term trader’s type of market. Because of this, keep the stop loss and pay attention to the larger levels. Currently, I am waiting on the sidelines for I think is an obvious pullback opportunity.

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.