By FXEmpire.com
The Light Sweet Crude markets rose during the session on Friday as the “risk on” attitude came back into the markets for the day. The $104 level continues to act as support for this market, and we think that as long as we stay above that level, we are buyers of this market.
The $108 level acted as resistance again, but the level is a minor one at best. The market remains bullish in tone overall, and until we break below the $95 level – we are simply not comfortable selling this contract. The $110 level will also be resistive, but the market looks up to the challenge of breaking above that level as well once it is all said and done.
The recent actions by the Iranians in defiance of the international calls for a curbing or their nuclear program continues to make the markets nervous overall. The recent concerns have even centered on whether or not Israel will attack the Iranian compounds that are said to be housing this program. The threats of a closing of the Strait of Hormuz is essentially considered to be a empty threat, but anytime there is this kind of uncertainty, the markets don’t like it.
The breaking higher of the $108 level signals to us a larger move higher, and we would be willing to buy at that point in time. The breaking below the $106 level suggests that we are going lower, but we don’t sell this commodity as the headline risks are far too numerous at the moment.
As the world continues to weigh the risks, the concerns of economic slowdowns could also push this market lower, but it seems that this market is far too volatile to bet on the price falling for any great length of time. In fact, it would take a total stand down by the Iranians in order to think that the market will sell off in any great move. The buying of dips will continue to prove to be correct, and we think the market runs up to the $120 area before it is all said and done.
Oil Forecast March 26, 2012, Technical Analysis
Originally posted here
