WTI Crude Oil Forecast: Pulls Back

[ad_1]

The market is more or less going to remain a “buy on the dips” situation, but you also need to be cautious with your position size as markets continue to be an absolute mess overall.

The West Texas Intermediate Crude Oil market fell on Wednesday as the Federal Reserve announced a 75 basis point interest rate hike. At this point, the market then fell back to the previous triangle, an area where you would expect to see a bit of support. Nonetheless, I think there’s also support to be found at lower levels, most specifically where the 50-day EMA is and the $110 level. That confluence should be an interesting place to find value if we get that opportunity.

Advertisement

The market has been extraordinarily bullish as of late but given enough time I think you were always going to have to see some type of pullback in order to find more buyers. The market is one that remains very volatile, but that can be said for almost everything. We have a fight between the idea of crude oil demand picking up with the reopening trade, but we also have to pay attention to the fact that there’s a potential slowing of demand going forward. Supply and demand are essentially all over the place now, so the only thing you can count on is going to be volatility. However, these big macro themes don’t change at the drop of a hat, so it does make sense that we would continue to see value hunting on the steps.

The market has been paying close attention to the bottom of the triangle as massive support, so it’s not until we break down below there that we will see a complete falling apart of the market. We would need to see absolute panic everywhere to make that happen, and although I certainly think that a lot of risk appetite right now is negative, a breakdown like that is very unlikely. Because of all of this, the market is more or less going to remain a “buy on the dips” situation, but you also need to be cautious with your position size as markets continue to be an absolute mess overall, and oil may see some of that behavior due to the interconnectivity of all global assets. On the upside, if we can break above the recent highs near the $124 level, we will make a serious attempt to break above $125. This is more likely than not going to happen sooner or later.

WTI Crude Oil

[ad_2]

Leave a Reply

Your email address will not be published. Required fields are marked *

Risk warning: Trading Forex (foreign exchange) or CFDs (contracts for difference) on margin carries a high level of risk and may not be suitable for all investors. There is a possibility that you may sustain a loss equal to or greater than your entire investment. Therefore, you should not invest or risk money that you cannot afford to lose. Before using xMetaMarkets services, please acknowledge all of the risks associated with trading.

The content of this website must not be construed as personal advice. We recommend that you seek advice from an independent financial advisor.

The information on this website is not directed to residents of certain jurisdictions such as United States, Canada, Iran, Cuba, France, and some other regions, and is not intended for distribution to, or use by, any person in any countries or jurisdictions where such distribution or use would be contrary to local law or regulation.

© 2018 - 2024 xMetaMarkets.com. All Rights Reserved.