By FXEmpire.com
The Light Sweet Crude markets had a slight bounce on Thursday as the bulls came back into the picture to try and lift the market higher. The selloff lately truly has been a bit strong and more than likely predicated on a stronger Dollar more than anything else. Certainly, the Middle East isn’t much calmer, and the demand hasn’t waned from such places as India, China, and Indonesia. The overall outlook for oil should be strong over time, but this isn’t to say that a pullback couldn’t happen.
The $100 level below should certainly cause some kind of reaction, and because of this we suspect the market will continue to find buyers, even if it does have a bearish tone to it at the moment. The longer-term trader will certainly understand that the oil markets rise over time, and there is a real threat to them continuing. However, as the most recent action has shown us – it will not be a straight shot up for this commodity.
The selling of this market isn’t a thought to us until a daily close below the $95 level, as we see it as being a “floor” for the bulls in this market. The pullback that we have seen could simply be a move to break the market back down to the previous consolidation area between $95 and $105. The positive candle for the Thursday session was an inside candle, as the fall on Wednesday was much stronger. This suggests that we may see a bias to the downside for a little longer as the bulls couldn’t quite overtake the damage done by the bears on Wednesday. The other factor that we will need to monitor is that the Non-Farm Payroll number comes out today and this can often influence the oil markets as well, as it is one of the biggest indicators on economic growth.
Because of this, we are actually prepared to wait out this market until Monday, and react accordingly. Quite frankly, until we get below $95, we are looking to buy – but haven’t had the supportive candles yet.
Oil Forecast April 6, 2012, Technical Analysis
Originally posted here
