November 3, 2022 [DailyForex] – Looking at this chart, we did break out of the channel, but we have not necessarily broken out significantly yet.
The West Texas Intermediate Crude Oil market has rallied a bit during the trading session on Tuesday to show signs of life and break above the 50-Day EMA.
The 50-Day EMA is an indicator that a lot of people watch, so with I think it does make a lot of sense that we would continue to see noisy behavior in this general vicinity.
Nonetheless, it’s likely that we will see the market pay close attention to the Federal Reserve and what’s going on there, because it will have a massive influence as to what happens with risk appetite.
Keep in mind that crude oil is the lifeblood of an economy, so obviously the stronger the economy, the more likely we are to see crude oil demand pickup. This has been the way forward for some time, and I think it will be the biggest thing we pay the most attention to. The market is going to try to get to the $90 level, perhaps even the 200-Day EMA which is closer to the $92 level. Anything above there opens the possibility of a move to much higher levels such as the $100 level. On the other hand, if we were to turn around and break down, it’s likely that the market would find plenty of buyers near the $82.20 level.
At this juncture, I believe it’s a market that will continue to see volatility, but you also have to keep in mind that OPEC recently just cut 2 million barrels worth of supply a day, and there are also concerns about what’s going to happen with Russian supply going forward. China being locked down occasionally and randomly in different places certainly will not help the situation either, as China is the world’s largest consumer of crude oil. Every time it seems like China is ready to reopen, oil surges, so that might be the biggest thing to pay attention to now.
Looking at this chart, we did break out of the channel, but we have not necessarily broken out significantly yet. I do believe that the Federal Reserve will have something to say over the next 24 hours that could determine the trajectory, a lease for the next several sessions after that. Having more fun to the game is the fact that the jobs number comes out on Friday.