- The light sweet crude oil market initially pulled back just a touch here on Tuesday to show signs of negativity before turning around and rallying quite nicely.
- By doing so, this is a market that I think is trying to do everything it can to perhaps reach the 50 day EMA just above, as it is so popular to watch.
Same Range? Probably.
With that being said, I think you have a scenario here where traders are going to continue to trade in the same range, we've been in with $62 on the bottom being the floor, perhaps extending down to $60. I see a potential here for just like a thick zone of support, if you will. To the upside, we have the $65 level, which is a large round psychologically significant figure, and it's an area that has been important multiple times.
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The 50 day EMA between now and the $65 level, of course, is something that people will be paying attention to. And of course, let us not forget that Wednesday is an FOMC interest rate decision, and that will have an influence on the US dollar, which will have an influence on what happens in the oil market.
With that being said, I think we will probably stay in this range but be aware there could be a lot of volatility on Wednesday. Playing the range and going back and forth has worked out quite well in this market for the most part of the last year, but it's worth noting that the range changes from time to time. Right now, it looks like it's in this $3 area that we have been trading for basically three weeks. At this point, back and forth trading is likely to be the way most approach this market.
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