Crude Oil Price - Mar. 5, 2013

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By: DailyForex.com

The WTI Crude markets fell during most of the session on Monday, but as you can see it got a significant bounce by the end of the session. This formed a hammer, and as a result a possible buying opportunity. The market is most certainly in a down trend, but there is definitely room for a bounce at this point. The $90.00 level was an area that I have pointed out in the past, and expected to see support come into play. This is one of the things that I love about this market, the fact that it is so technical.

The area could be the bottom of a just now forming consolidation area, which I think would have a top of roughly $98.00 or so. The market has been selling off aggressively, and I think this has been mainly predicated upon the idea of a strengthening US dollar, and not necessarily a shift in the economies around the world. After all, not a whole lot has changed, except perhaps the political situation in Italy.

Short-term move

I think the next move is higher, assuming we can break the top of the range for Monday. This is essentially a break of the $91.00 level. The area has about two or three dollars of room before resistance comes into play, and because of this I think the initial push could be relatively strong. However, the $94.00 area could be a hiccup waiting to happen for the buyers.

This set up is interesting to me because of several other markets. The gold market looks like it is trying to find a bit of a bottom, and the “Dixie”, or US Dollar Index looks ripe for a pullback. For that matter, the AUD/USD pair looks like it is going to form a hammer for the session, showing potential USD weakness. However, I am not necessarily thinking that the Dollar is going to decline for very long. I just think that the move needs to pull back. This should allow commodities to bounce for the moment, before more bearishness comes into play. Although I see a potential consolidation area up to the $98 level, I am for the moment assuming that this is only a short-term move.

Crude Oil

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.