The WTI Crude market fell during most of the session on Wednesday, but as you can see formed yet another hammer focused on the $90.00 level. It is because of this that I feel this market is due for a bounce, and certainly expected sometime over the next couple of sessions. Of course, there are several different crosscurrents going at one time, so there are plenty of reasons to think that this could happen.
With the slew of central bank meetings and announcements over the next 24 hours, there is a high potential for commodities to start gaining again as central banks trying to outdo each other when it comes to killing their own currencies. The Bank of Japan is up first, and it will be interesting to see what they do in order to devalue the Yen even further. After that, we have the Europeans and the British both doing their best to destroy their currencies as well. However, the Europeans are less likely to be aggressive about it, so it does give a little bit of a boost to that currency all things considered.
If the Dollar finds itself being devalued over the next couple of sessions, we could see a rise in the price of oil. For me, I believe the most likely scenario for that to happen will see a strong jobs number on Friday. This is because quite often the marketplace will anticipate economic growth around the world, as a result of things getting better in America. With that kind of mindset, it's only a matter of time before they begin to question whether or not the demand for crude oil will pick up as well.
Two hammers in three days
From a purely technical analysis point of view, the fact that we have formed two hammers in the last three days at the $90.00 level suggests to me that the selling has been a bit overdone. Simply put, the sellers are running out of steam at this point. I think that a move up to about $93.00 is very likely over the course of the next couple of sessions. Ultimately, this market does like to consolidate, and we will be watching it in order to figure out where the tops going to be.