By FX Empire.com
Light Sweet Crude markets have recently started to fall, but the Friday session saw the market pick back up. The rise was a small range though, and as a result it isn’t as impressive as one would have thought would be the case given the fact that the United States’ Non-Farm Payroll came out much stronger than expected.
The oil markets have been pushed back and forth by a couple of different factors at the moment, the biggest of course being the situation that is ongoing with the Iranian regime. The Iranians are being threatened with an embargo of their oil by Europe, in six months however, and this could increase the tensions between the two regions. This could lead to reactive moves by both sides. The Iranians are already starting to threaten the Europeans with a preemptive closing of the spigot.
The markets will certainly be paying attention to all of this, but the demand picture is still weak. The strong employment numbers can mean more use in the US, but this is a one-time number at this point, and hardly a trend. However, it does bode well for the future.
Looking at the charts, the $98 level was our trigger to start selling this market. The trigger fired off, and then raced down to the $95.50 level. The candle for the session looks like a doji of sorts, and this shows just how stagnant the market is at the moment. The $98 level is being retested at the moment, and now we have to watch this area as a potential trigger again.
The $98 level should be resistive, and if it is broken above, this would have us flat again. We are not willing to buy this market until we get a close above the $105 level. The $98 level could offer enough resistance to produce a weak candle, and if so – we would sell. So far, it has held. Now we will add to the sell position if we get a hammer or something like that in this area as it would show a confirmation of the breakdown being significant.
Oil Forecast February 6, 2012, Technical Analysis
Originally posted here
