By FXEmpire.com
The Light Sweet Crude markets had a back and forth week over the last several sessions as the markets have to discern whether or not there will be enough global growth to warrant the higher prices we have seen lately. Of course, there are also the concerns about the Iranian nuclear standoff, and headlines in the area can always push this market around.
The weekly candle is a doji, and this suggests that we are simply trying to figure out which way to go. (Hardly a surprise if you think about it.) The $100 level just below has been very supportive, and we think that this area will continue to be so. It is because of this level being just below that we think perhaps the next move will be up in this market.
The breaking below of the $95 level needs to be accomplished in order to seriously see some kind of selloff that is worth getting involved in, and with all of the headline risks out there, we think this is the least likely of the scenarios to come.
The $105 level is a resistance area that we are looking to buy a break of, and would use a daily close to signal our longs. The market has a relatively tight supply in it, so this would make sense. However, the Dollar needs to calm down in order for this to happen, so although we have a fairly clear level; the headlines have to be watched going forward in determining how we are going to play this market. Until the $105 level gets taken, we think that perhaps the bulls would come back into control for the longer-term, with the usual bumps along the way.
The $110 level above is also resistive, as is the $115 area. The most likely scenario for us is a grind higher, and as such we are willing to be patient with longs. As this is the case, patience for the signal may also be needed as this market looks like it is “tight”.
Oil Forecast for the Week of April 16, 2012, Technical Analysis
Originally posted here
