By FXEmpire.com
The Light Sweet Crude markets fell during the Tuesday session as the Federal Reserve minutes came out, failing to give the markets a reason to believe in the possibility of another round of quantitative easing. As a result, the Dollar gained overall, and this of course had an effect on the oil markets.
The move is less an anti-oil one, and more a pro-Dollar one. Because of this, we still believe the pullbacks are buying opportunities, and this one shouldn’t be any different. The $104 level looks as if it is trying to be supportive, and we will be buying this market based upon supportive candles in the area. The market has been grinding slightly lower lately, so we aren’t ready to buy and hold, although the oil markets could very well be much higher over the course of the year.
As we have seen lately, the market will be choppy going forward. The down trending channel hasn’t been broken to the upside yet, so any buy orders will be of the short-term only at this point. In order to get bullish for a longer time period, we need to see the top of the channel broken on a daily close, perhaps to the $107 level. This would suggest that the momentum has picked up for the bulls, and would more than likely have the shorts covering their positions.
The recent action has been a slow grind, and although the market has fallen, it has struggled to do so in any convincing manner. The tensions in the Middle East will continue to put a floor in this market going forward, although the risks of an armed conflict do seem to be cooling off. On the other half of the situation, the demand for oil continues to be strong form such places as China, Brazil, and India. As long as the emerging markets are looking to buy more oil, it is hard to think that this commodity will have any significant fall in price. We are buying pullbacks until we break below the $95 level.
Oil Forecast April 4, 2012, Technical Analysis
Originally posted here
