By FXEmpire.com
The Light Sweet Crude markets rose slightly during the session on Monday as the markets bounced from the lows to rally and form a hammer for the session. The hammer is sitting just above the $102 level, and that area should now be supportive going forward. With this in mind, a break of the highs for the Monday session would have us long, but expecting choppy action going forward.
The oil markets got a bit of a bearish vibe going for the session originally as the Iranians and the West decided to keep talking over the weekend in order to come to terms over the nuclear program that Tehran has been pursuing. However, as time went on during the Monday session, the oil markets bounced as people began to think of the likelihood of a solution coming – or rather the unlikelihood of it. This brought the Middle East premium back into the market.
The down trending channel that we have been trading in now looks threatened and the downtrend line on the top of it will have to be overcome for the bulls to continue moving forward. This could lead to some of the grind higher that we expect, and may make this a fairly scary market to be long of at the moment, but this is one that has been in a long-term bullish mode for quite some time, so the overall weight of the market is pushing higher in our opinion.
The $108 level will be the larger test, as it has been so resistive lately. If the market can find a way through that level, it could continue much, much higher as this is be where many of the stops for the sellers will be found. The $110 level will also cause a reaction, but by the time we get that high in this market, we would expect it to give way. As for selling, this market cannot be sold until we get below the $95 level as it would represent a massive signal of bearishness in the markets as it has been such a floor over the last 6 months.
Oil Forecast April 17, 2012, Technical Analysis
Originally posted here
