• The light sweet crude oil market has gone back and forth to show signs of hesitation, but at this point in time, we are sitting just below the $100 level.

• We did bounce from the 50-day EMA and that does matter.

  

I think ultimately you have got a situation where if we can break above the $100 level, then $105 could be very real. Breaking below the 50-day EMA opens up a drop to the 50% Fibonacci retracement level of the bigger move going back several months, possibly even opening up a drop down to the 61.8% Fibonacci retracement level near the $86 level. The $105 level has proven to be very difficult, and if we can break above there, the $110 level is, in fact, where we go longer term.

Market Dynamics and Outlook

All things being equal, I expect a lot of choppy behavior out of oil because, quite frankly, we have got a bunch of people in the news throwing headlines around to move the markets and not really anything fundamentally driven other than the fact that there is going to be a shortage, no matter what people think or want.

A move above the $110 level opens up the possibility of a move to the $120 level before it is all said and done, but I do not see that happening yet. All things being equal, I do think that we are trying to find some type of summer range from which to trade in, and with that, I look at this as a market that, quite frankly, if we get an opportunity to buy the dip, you probably want to.

I just would not look for huge gains. I think finding a little bit of value in oil makes a certain amount of sense this time of year, but again, remember, this could be moved by the latest tweet or press conference, you just do not know.

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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.

As seen on: Pairs Of Aces Podcast,The Trader Guy, FXEmpire