Crude continues to see a lot of noisy behavior, as we are trying to turn things around.
Light Sweet Crude Oil
The light sweet crude oil market has rallied a bit in the early part of the trading session here on Tuesday as it looks like we are going to continue to see a little bit of a potential basing pattern, which makes sense. We’ve filled the gap from the kick-off of the war, which of course sent crude oil prices as high as $120 a barrel. But we’ve seen light sweet crude chop and then drop since then.
I think what we’re getting into now is the potential of a summer range. The summer range of course is something that’s typical in this market, as drivers have a certain set of demand for fuel and it’s just steady as she goes. That trading range typically falls around $10 to $12 a barrel from top to bottom. We’ll see whether or not that actually happens, but I think it makes a certain amount of sense.
Summer Range and Key EMA Resistances
The $80 level would be a psychologically important resistance barrier, and the 200-day EMA sits just below there, with the 50-day EMA racing towards it. I think we’ve seen the bulk of the selling of light sweet crude, but I also recognize that we could go a little bit lower.
As things stand right now, though, I think we need to keep in mind that most traders are probably a little cautious to start buying crude oil, and we also have to factor in the idea that just because oil’s flowing in doesn’t mean that the entire supply chain is back to where it should be. Quite frankly, it isn’t.
So, I do think higher pricing makes sense. Markets tend to overreact in either direction. Maybe a little bit of equalization in this area. Short term, I’m mildly bullish. I wouldn’t go over the top here. Longer term, I think I’m pretty much neutral.
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Christopher Lewis is a technical analyst and market commentator at DailyForex with more than two decades of trading experience in Forex and other leveraged markets. Based in Columbus, Ohio, he specializes in chart-based analysis of major currency pairs, stock indices, commodities, and energy markets, focusing on clear support and resistance levels, trend structure, and risk management. Christopher produces daily written and video analysis for traders who rely on technical setups to navigate volatile market conditions
As seen on: Pairs Of Aces Podcast,The Trader Guy, FXEmpire
