Will crude oil breach the $70 level despite market uncertainty?
Tuesday brought uncertainty for the crude oil futures contract as it closed 0.16% lower following recent advances.
The market reacted to the stock market's rebound and weaker U.S. dollar. Last Wednesday's FOMC meeting had little impact on the markets, but oil rebounded from its local low and continued higher.
Today, oil prices are up 0.9%, testing potential resistance at $69-70 again.
Conclusion
Crude oil is trading near the important $70 level as the market awaits the inventories release at 10:30 a.m. The picture remains basically unchanged, with futures fluctuating after rebounding from a two-month decline.
Is this a good time to open a short position? I don't think so - the market is approaching strong medium-term support levels and could move sideways or rebound.
For now, my short-term outlook is neutral.
Here’s the breakdown:
- Crude oil remains near the key $70 level.
- In my opinion, the short-term outlook is neutral.
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Thank you.
Paul Rejczak,
Stock Trading Strategist