The light sweet crude oil market has shown signs of stability yet again during the trading session on Thursday as we are hanging around the $93 level.
The Wednesday session ended up forming a bit of a hammer bouncing from the 50 day EMA and the 61.8% Fibonacci retracement level.
All things being equal, this is a market that continues to see a lot of volatility and a lot of questions asked of it but quite frankly now we are just moving on the latest headlines coming out of the Middle East and there really hasn't been any.
So that's somewhat of a good thing. That keeps the crude oil market somewhat calm and now we have to discuss whether or not we are going to try to find some type of range to trade in. To the upside I see the $95 level as immediate resistance but probably more substantial resistance at the psychologically important $100 level.
To the downside the 50 day EMA and by extension the 61.8% Fibonacci retracement level both make sense as support. Breaking below there then opens up a drop to the $80 level. If we can get peace in the Middle East, then I do think oil drops eventually but I don't think it drops down to where it once was.
Top Regulated Brokers
I just don't see $56 a barrel as being the fair price. We have done a lot of damage; there will be a lot of “what ifs” out there. Maybe we try to find the 200 day EMA which is at just under $72 a barrel. I think that would probably make most people happy in both directions of this trade.
But if we get some type of negative event or headline coming out of the Middle East in the short term that could send this market crashing straight up in the air towards the $100 level possibly even higher than that. All things being equal I'm fairly neutral on oil at the moment because we are just in a wait and see pattern.
Ready to trade the daily crude oil Forex forecast? Here’s a list of some of the best Oil trading platforms to check out.