By FXEmpire.com
The Light Sweet Crude markets fell again during the Wednesday session as the Americans reported a build again in inventories. However, as the session drew to a close, the action produced a hammer yet again. In fact, this is the third hammer in a row and a rare sign. The $95 level has held firm so far, and as a result we are looking for buy signals at this point in order to take advantage of this obvious strength.
The three hammers set up a clear cut area from which to trade now. The $95 level is even more convincing as a “floor” in this market because of this action, and we are looking to see a break above the highs from the three sessions in order to buy at this point. A move to $102 seems very likely if we get that break, based upon the support and resistance levels that we see on this daily chart.
The oil markets will continue to be pushed around by headlines coming out of the European Union, and occasionally the Middle East. The fears in Europe cause a run to the US dollar, and this is almost always bad news for oil markets as those barrels of oil are priced in Dollars.
The one thing that managed to help oil prices during the session was the propensity of American traders to completely ignore the rest of the world, and the obvious problems. In fact, this week we have seen Asia and Europe sell commodities like oil, only to see Americans come in and pick them back up. This is a pattern that day traders can use to their advantage at this point: If the markets are down at the European close, simply buy once the Americans are on their own as the bounce is almost promised at this point. However, it must be said that the overall picture is weak.
It is because of that last statement that if we get our above mentioned buy signal, we are taking profits just below the $102 level as the market doesn’t seem to want to get into a trend just yet. As for selling, a daily close below the $95 level would force us to do so.
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Originally posted here
