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Crude Oil Forecast: Oil Continues to Trade in a Range During Holiday

Oil market finds itself within a range defined by two significant levels. One is the support level at $68, and the other is the resistance at $75. Consequently, the market currently stands at a point that can be described as fair value, rendering it a rather neutral market.

Crude oil markets experienced a decline in trading activity Monday, due to the observance of Martin Luther King Jr. Day in the United States. The limited electronic trading during this holiday period had a limited impact on the market dynamics.

Crude Oil Signal Today 16/01: Oil Trades in Range on Holiday (Graph)

WTI Crude Oil

WTI, or West Texas Intermediate crude oil, saw a modest drop in trading activity during this particular Monday due to the holiday (check out our Season Trading Schedule article). The futures markets, which typically operate for 23 hours a day, were not fully operational. This market behavior can be attributed to the prevailing uncertainty surrounding various factors such as attacks in the Red Sea, fluctuations in interest rates, geopolitical concerns, the possibility of a recession, the strength of the US dollar, and a myriad of other variables.

In the present scenario, it becomes challenging to take significant positions in any direction, and oil is no exception. The West Texas Intermediate crude oil market finds itself within a range defined by two significant levels. One is the support level at $68, and the other is the resistance at $75. Consequently, the market currently stands at a point that can be described as fair value, rendering it a rather neutral market.

Brent

Brent, which mirrors WTI in many aspects, faces a similar situation. The market grapples with significant resistance at $80.50 above and substantial support at $72 below. As the price hovers around $77, it positions itself right in the middle of the market's noise. While considering opportunities, it seems reasonable to look for value before diving into crude oil investments.

In the grander scheme of things, it's anticipated that the market will eventually reverse its course. However, the ongoing uncertainty regarding the possibility of a recession and the existing supply levels serve as impediments to a substantial upward trajectory. As of now, the market appears to be in a phase of accumulation.

Overall, the oil market presents challenges for those seeking longer-term trades. However, for traders who thrive in range-bound conditions, this market might prove to be conducive. As of the current moment, the market positions itself squarely in the middle of the range, signifying a state of equilibrium and neutrality.

Top Forex Brokers

    At the end of the day, the recent fluctuations in crude oil markets, exacerbated by the holiday-induced thin trading, reflect the broader economic uncertainties and geopolitical factors at play. While Crude oil may present opportunities for short-term trading within its defined range, it remains susceptible to a multitude of external influences, making it a challenging prospect for long-term investments. As the global economic landscape continues to evolve, monitoring these factors will remain crucial for participants in the crude oil market.

    Ready to trade our WTI Crude Oil Forex? We’ve made a list of the best Forex Oil trading platforms worth trading with. 

    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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