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Crude Oil Price - August 22, 2013

By: DailyForex.com<

The WTI Crude Oil markets fell during the session on Wednesday, as the Federal Reserve released the minutes from the last meeting suggesting that more of the board members were in agreement with Mr. Bernanke than originally thought. Because of this, it's very possible that the US dollar will continue to climb over the longer term as tapering off of quantitative easing is still a possibility. If that happens, this obviously will drive down the price of oil, as it is very dollar sensitive.

However, I still see support down near the $103 level, and resistance of the $109 level. That being the case, we are still well within the tolerances on that consolidation area, and that being the case there's really not a whole lot to Garner from this move quite yet. Quite frankly, if I saw a supportive candle down in this general vicinity, I would be just as likely to buy this market as I would be to be worried about the support giving way.

Crude Oil Chart Aug 22

The Federal Reserve controls everything

The Federal Reserve currently controls everything in the financial markets, as the main question that most traders around the world are asking is whether or not they will taper off during September or October. If they do, that will be very strong for the US dollar, and as a result commodities on the whole will get absolutely spanked. That will be especially true with oil, as most of the reason this market has been supported over the last several months has been concerns about the US dollar.

That being the case, the Federal Reserve and headlines coming out of that will be very important for the future of the oil markets. If we do close below the $103 level, I think that we will go down to $99 relatively quick, where I expect to see quite a bit of support. We could go lower, but quite frankly there so much noise below that I would suspect that buyers would come in looking for value. On the other hand, if the Federal Reserve does not taper off, you can expect oil to go much, much higher.

Christopher Lewis
About Christopher Lewis

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.

 

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