Crude Oil Forecast 18/07: Recovery Gains Momentum (Video)

(MENAFN- Daily Forex)

• The light sweet crude oil market has rallied slightly during the trading session on Thursday, breaking above the top of the hammer that we ended up forming on Wednesday.
• This is classic technical analysis, and it does suggest that we should go higher from here, but keep in mind that we are in the middle of summer and therefore volatility and or volume might be a little bit anemic.
• The last time we saw true volume in this market; there was a war going on between Israel and Iran that tells you how sluggish this market is now that we have peace breaking out.

That being said, breaking above the top of the hammer does attract a lot of traders. So, we'll see whether or not the technical traders can push this market towards the 200 day EMA above, the day EMA is currently at the $68.32 level. And it is worth noting that it has been reasonably reliable over the last couple of weeks.

On a Break Above Monday High

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If we can take out the top of the Monday candlestick, that would be an extraordinarily bullish sign and could open up a move to the $74 level. All things being equal though, I anticipate that this is a market that will continue to be more buy on the dip in short term burst with the $65 level offering support all the way down to the $64 level, which had previously been a major ceiling for, or a neckline even for an inverse head and shoulders. I don't necessarily think that the market is going to break down below there, but if it were to do so, that would be a very negative sign. At this time of year, typically we do get more demand. So, I do tend to lean towards the upside, but that doesn't mean that you pile in. I think this is a short-term trade with more of an upward grind behind it.

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