By FXEmpire.com
The Light Sweet Crude market collapsed during the session on Friday as the Non-Farm Payrolls number came out extraordinarily weak. The 69 thousand jobs added in America during May will certainly not be enough to drive growth going forward, and the fact that 49 thousand jobs were also trimmed off of the March and April reports in the form of revisions certainly won’t add to the prospects of economic growth.
The $85 level was sliced through like it didn’t even exist, and this would have been helped by poor economic numbers out of China early in the session. All things being equal, it looks as if the economic outlook for global growth is slowing, and this of course will have an effect on the demand for oil. As the industrial base does less and less producing, there will be a serious lack of demand and this is what the markets fear at the moment.
The possibility of quantitative easing has reared its head again amongst traders, but the reality is that there will be easing around the world if the economies are all slowing down. The market managed a bounce of sorts at the end of the day, but it was so insignificant that it looks like any positive action will be treated with suspicion. This has us selling any and all rallies until we see a breakout above the $90 level, which looks quite safe at this point in time. The $80 level below is a major support level, so it simply must hold if the bulls want to continue to try and push markets higher. However, it must be said that at this moment it looks very likely that the bearish pressure will continue. In fact, the only real chance for the bulls at this point is for the Fed to come into the markets and ease in some form.
The selling will be done off of short term charts such as the hourly and 4 hour markets, as the rallies will end up being simply a chance to sell at higher prices. If $80 gives way, this market should go to the $75 handle.
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Originally posted here
