Crude Oil Price- Oct. 14, 2013

The WTI Crude Oil markets fell during the majority of the session on Friday, but as you can see found enough support right around the $101 level in order to bounce and form a nice looking hammer. This hammer is at the bottom of a consolidation area that goes all the way up to $104, so I feel that this market is ready to take off to the upside relatively soon. That being said, the easiest way to trade this market is to simply wait until we get a daily close above the $104 level, as that would signify a return to the previous consolidation area, and perhaps target the $108 level before it's all said and done.

Going forward, I don't see any chance to short this market simply because the $100 level almost have to be supportive based upon the large round psychological number aspect of it, and longer-term charts that show that the support should extend all the way down to the $99 level, which is the beginning of the very noisy part of this chart. Because of that, this is a "buy only" market for me at the moment.

The Federal Reserve and the value of the US dollar

At this moment, I don't believe that supply and demand has even a thought as far as this market is concerned. I believe it comes down to the Federal Reserve, and whether or not they can taper off of quantitative easing. With a lack of employment numbers in the United States due to the US government shutdown, there are a lot of questions out there and people still wonder whether or not the Federal Reserve is going to be able to taper off of quantitative easing anytime soon. If that's possible, then it brings up the value the US dollar, which should in turn punish the value of oil markets. On the other hand, if it looks like the Federal Reserve cannot taper anytime soon, that should put a bid back into the oil markets under those circumstances.

Crude Oil Price 101413

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.