- During the early hours on Monday, we have seen the light sweet crude oil market fall again.
- That being the case, it looks like we are trying to wipe out the gains from the Thursday session, but it’s probably also worth noting that the market has bounced a bit from the lows.
- The question now at this point in time for me is going to be whether or not the $62 level holds for support.
- After all, that’s an area where we have seen a lot of resistance previously, so with that being the case, I think it does make for an interesting area of trading.
Technical Analysis
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The technical analysis for this Crude oil pair obviously is still very negative, but we are also serving the witness quite a bit of volume near the $60 level, an area that is large, round, psychologically significant figure, and an area that has been important multiple times. The $60 level of course is an area that over the longer term has been important, and of course you have to keep in mind that there will be a lot of options traders involved in that region. Furthermore, to the upside we also have the $65 level, an area that previously had been major support. That should have a certain amount of “market memory” attached to it, therefore I think it’ll be interesting to see how we behave there. If we can overcome that level, then I think crude oil goes much higher.
On the other hand, if we were to drop down below the $60 level, then we could see a deeper selling, but at this point time it does look like we are at least trying to form some type of bottoming this market, as we have seen quite a bit of volume in that region. Furthermore, we are starting to see traders start to ask questions of the cycle, because this time of year we are starting to see more demand for crude oil. Because of this, I think there are a lot of people out there looking to find a bit of value here.
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