Potential Signal:
- I am a buyer of this market above $65, with a stop loss at the $63.75 level.
- I am aiming for $67.50.
The light sweet crude oil market took off to the upside after the non-farm payroll announcement came out hotter than anticipated. That being said, we are facing a crucial $65 level that we must pay close attention to the $65 level of course is an area that’s been important multiple times. And now I think at least it is somewhat, and you have to be a little bit artistic here with your definition, the neckline of an inverted head and shoulders. I understand that there is a wick on the first shoulder that goes all the way down to the head, but looking at just the bodies, that’s pretty much the story it’s telling.
Barrier Above and a Little Artistic License
Furthermore, the first shoulder and the head make up a double bottom. So, either way, it does look like we are trying to do everything we can to turn things around and rally quite nicely. Breaking above the $65 level opens the possibility of a move to the 200 day EMA sitting just above the $68 level. A short-term pullback at this point in time could be a buying opportunity. And I’d be especially interested in oil near the 50 day EMA. which is at the bottom of the candlestick for the session. Ultimately, this is a market that I think continues to see a lot of noise, a lot of external nonsense, but at the end of the day, it does look like the jobs number basically confirmed what I think some of the commodity markets have been telling us. The global economy is not falling apart and definitely not the U.S. economy. Yes, it’s a little slow, but will it be anything other than a minor recession or maybe not a recession at all? I don’t think so. So, with this, it looks like more demand is coming.
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Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.