By FXEmpire.com
The Light Sweet Crude market rose for the session on Friday in order to retest the breakdown on Thursday. The market has started to sell off in the late hours, and this suggests that perhaps the move was predicated upon profit taking at the end of the week for the bears. The Light Sweet Crude market does have significant support below, but the area has already been pierced. With this being said, we are still very bearish of this market, and are looking to sell rallies when they fail, and a break of the bottom of Friday’s action.
The fundamental picture for the oil markets is really poor at the moment. In fact, most of the reason we have even seen a bid overall during the last several months has been based upon the problems with Iranian, and the concern of potential war.
The $80 level has been massive support in the past, and now should hold as resistance in the future – all things being equal. As long as it holds, this market should fall. If it doesn’t, we see a real shot at resistance in the $85 area as well, and would sell a weak daily candle at that point too.
The US dollar has been very strong lately, and with all of the global concerns about growth in markets, it is hard to think demand for oil will suddenly pick up. In fact, the US, Germany, and China all put out significantly weak economic numbers on Thursday, and this shows that some of the trading community’s biggest fears may be coming true. If there is no growth in Germany, Europe will fall into a deep recession. If there is no growth in China, there is no Chinese export expansion – and this shows everyone else is slow. Add to this the fact that the US has been a bit of an outlier in this depressed economic time, and you have a lot of things for traders to think about. We are selling a break of the Friday lows, and sell rallies that show weak candles.
Click here to read Crude Oil Technical Analysis.
Originally posted here
