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MENAFN- Daily Forex)
The West Texas Intermediate Crude Oil market has seen a bit of a drop, only to turn around and show signs of life again. By doing so, it shows that there is at least some fight left in the market, despite the fact that we have been falling quite rapidly over the last couple of weeks.
I believe at this point in time the Crude Oil market is going to continue to pay close attention to the $68 region, as it is an area that has been important and significant support in the past. Rally and from here would be expected due to the fact that we are so oversold, but the real question will be asked about whether or not we can get above the $72.50 level, as it is an area that a lot of people have paid close attention to in the past, and I think ultimately, we've got a scenario where people will be waiting to see whether or not the previous support should then offer significant resistance in a phenomenon known as“market memory.”
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Keep in mind that the global economy looks precarious at best, and I think a lot of people are going to keep an eye on crude oil as a way to express what they believe when it comes to global growth. After all, oil is essentially the“lifeblood” of the global markets, so if there is a significant drop in economic growth, that means there will be a significant drop in crude oil. That's essentially what's been going on for the last couple of weeks, and now the question will be whether or not we see any follow through.
If we were to break down below the lows of the last couple of days, we could see oil really start to drop drastically. On the other hand, I think we got a situation where we are trying to find the floor, and therefore it could be choppy and noisy over the next couple of sessions.
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