The WTI Crude market had a strong showing during the session on Tuesday, as the "risk on" trade came back into play. The candle close towards the very top of the range, and as a result it does look like we're going to continue to grind higher in this market. I can see that there is quite a bit of support below, and the resistance above runs all the way to roughly $98.25. I think that the market will continue to try and grind it to that level, but may slow down over the next couple of sessions.
Is because of that that I'm actually interested in buying the pullbacks as they come. I think that eventually we will find ourselves in some type of a range for the spring and possibly summer months, which is quite common in this pair. After all, one of the best things about trading oil is that it tends to be a very technical market, and as a result range bound trades can make you a lot of money.
The light sweet crude market tends to react more to American fundamentals than European, simply because it is used more in North America. In a sense, when you trade this particular time of oil you are betting on the American and Canadian economies. Because of this, it makes sense that this market continues to outperform other markets such as the Brent and Dubai contracts.
Continue to watch the Federal Reserve
As far as I can tell, one of the main drivers of this particular market will also be what the Federal Reserve does. It is my firm belief that the Fed will continue to operate in an easy monetary policy, and as a result the gains of the US dollar kept somewhat subdued, even as money flees Europe. In fact, I believe that the reason that the EUR/USD has been completely fallen apart is the Federal Reserve itself. With that being the case, oil should continue to have a bit of a bit underneath it, and I believe that buying on the dips will be the way to go.