Enter your emailI will be looking for short-term rallies that I can fade because it should offer a bit of value to the downside. fell rather hard during the early hours on Monday, crashing into the previous support level of around $87.Ultimately, the market has continued to defend this area, but it is more likely than not going to be an area that will eventually get broken.
When you look around the world, there is a severe concern when it comes to global growth, as it seems to be disappearing. Any lack of growth is almost always shown up as negativity in the oil market, as demand should drop overall. I think that’s what is being priced in right now, so it is most certainly going to continue to be negative. That being said, we have seen a little bit of a bounce, and the volatility of oil will more likely than not continue to be a major factor.
It looks as if the $94 level above should continue to be resistance, and breaking above that would be a pretty strong sign. I don’t necessarily see that happening anytime soon, but it’s something to keep in the back of your mind. As things stand right now, it looks like we are grinding back and forth in order to try and find some type of consolidation pattern, but it most certainly seems to be favoring the downside in general.
I will be looking for short-term rallies that I can fade because it should offer a bit of value to the downside. The US dollar continues to be a very strong currency anyway, so I think it only makes sense that the oil markets will struggle to keep up against that type of massive momentum in the currency market.