The WTI Crude Oil markets fell during the session on Thursday, which of course is very surprising considering that the US dollar got absolutely pummeled. Because of this, we managed to fall the way down to the $100.03 level during the session, but found enough support to bounce and form a nice looking hammer. In fact, this hammer is exactly where we would want to see it, and I believe that we will see this market go bit higher in the short term.
Right now, I think we are essentially stuck in consolidation with the $104 level above being the resistance. If we could get above that level, I have almost no doubts that the $108 level would be attempted. In the short term, I do believe that this market goes higher, and if you have more risk tolerance, you may actually want to consider going long off of the short-term chart. If you are not particularly excited about putting a lot of risk on a trade, been waiting until the top of the daily candle for the session on Thursday gets broken is probably the safest way to go for the short-term, and waiting until the $104 level gets broken to the upside is probably even safer than that.
FMOC member speaks, market listens.
FMOC member Evans spoke during the session on Thursday, suggesting that the Federal Reserve will not be able to taper off of quantitative easing until it gets several months’ worth of data, and as a result this means that tapering off of the quantitative easing program is almost undoubtedly going to happen in 2014 at the earliest. That being the case, traders sold off the US dollar and began trying to diversify. Obviously, this market is priced in US dollars, so that surprises me that this market fell.
However, I believe that there is a bit of an anomaly in this market right now, and that the higher oil lower US dollar correlation will return. That being said, I'm actually going to go long be of the options market right now, and place a "risky" trade.