(MENAFN- Daily Forex)
- The West Texas Intermediate Crude Oil market has finally broken down during the trading session on Thursday as the market is starting to price and the idea of a recession.
- The market looks very likely to continue seeing massive downward pressure.
- The demand is going to be determined by the fact that we are heading into a recession.
Advertisement Take advantage of today's Crude Oil movements Trade Now Looking to the $80 level
The US dollar strengthening would also put negative pressure on the oil markets, but at this point in time, it's not even that for once. Now that we are well below the 200 Day EMA , and of course the bottom of that hammer that suggested massive support at the $90 level, it's likely that crude oil goes looking to the $80 level over the next several weeks. Keep in mind that the jobs number comes out during the trading session on Friday, so there will be a bit of volatility due to that as well. Nonetheless, markets will continue to look through the prism of noise more than anything else, and as long as the market is noisy, it is one that people don't want to be invested in with a large amount of money. The attitude of the crude markets shows just how erratic the world is at the moment.
I believe that by the end of the day Friday, we may have a lot of questions answered, but then again one would've thought that had been the case by now anyways. Demand seems to be dropping, and it appears that most traders believe this as well, because quite frankly OPEC has decided to barely budge it comes to output production. If they do that and we can't see a rally in price, then that tells you most of what you need to know to begin with.
It is not until we break above the 200 Day EMA on a daily close that I would consider going long , and even then I think it's probably unlikely that we would be in the“all clear” anytime soon. I think the only thing you can count on is a lot of noise and volatility, which unfortunately is something that we've had far too much of in financial markets as of late. Rallies more likely than not will set up for selling opportunities for those who are patient enough to look for signs of exhaustion.
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