Crude Oil markets slam into resistance on Friday

The crude oil markets rallied significantly on Friday, slamming into resistance in both the WTI and the Brent grade that we follow here at FX Empire. The market looks likely to respect this area, for the short term at best. However, longer-term I think it’s only a matter of time before the buyers overpower this level. · FX Empire

Christopher Lewis

Updated Fri, May 4, 2018, 11:20 PM

WTI Crude Oil

The WTI Crude Oil market exploded to the upside during the session on Friday, testing the $70 level. That’s an area that is massive in its implications, and I think if we can break above that level it’s likely that we could continue to go even higher, perhaps towards the $75 level over the longer term. However, it looks as if $70 is going to offer a bit of resistance, so I think that when we pull back, it’s only a matter of time before the buyers jump into this market and take advantage of any type of value that appears. The alternate scenario of course is that we break above the $70 level, reaching much higher. I think that would be a nice momentum trade, but I also like the idea of picking up value. Shorting isn’t much of a thought now.

Brent

Brent markets exploded to the upside as well, reaching towards the $75 level. That’s an area that has been resistive recently, so it doesn’t surprise me that we are struggling to get above there. I think if we can break above the $75.50 level, then the market is free to go to the $77.50 level next. Short-term pullback should continue to be buying opportunities, and I think that the $70 level underneath is significant support as a bit of a short-term “bottom” in the market. Even if we do break through there, I highly doubt that we could break down through the $72.50 level.