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MENAFN- Daily Forex)
The Light Sweet Crude Oil market has been back and forth during the month of July, much like many other markets. After all, we are in the quietest time of year, with perhaps the exception of the holiday season, and although summer is typically bullish for oil, it's difficult to get overly excited about the market right now because I think a lot of people are worried about the excess supply that OPEC continues to probe into the market.
Furthermore, we also have to keep in mind that although there is a lot of demand for crude oil this time of year, there are a lot of questions when it comes to the global trade situation, which of course has been upended by the tariffs coming out of the United States. As long as that's going to be the case, I think you have a situation where there is a certain amount of uncertainty, but as things stand right now, this is simply a market that I think a lot of short-term traders are attracted to, mainly due to the fact that there is nothing really moving at the moment.
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The technical analysis for this pair is very sideways, with the $65 level underneath offering support, and the $70 level above offering resistance. It's quite common for oil markets to trade in $5 or even $10 increments, and that's exactly what's going on here. We recently had seen a lot of volatility due to the war between the Israelis and the Iranians, but as that calmed down, we saw the market collapse right back into the $65 region, an area that previously had been resistance. This of course launched a certain amount of“market memory” to come into play, so it makes perfect sense that we have bounced from there a couple of times.
If we were to break down below the $64 level, then I think the crude oil market is in trouble. Conversely, if we were to break above the $70 level, then it's likely that the crude oil market launches toward the $73 level, where we currently find the 200 Week EMA. Ultimately, I expect a lot of sideways choppy behavior.
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