The West Texas Intermediate Crude Oil market rose considerably during Monday’s trading session, as the 200 Day Exponential Moving Average (EMA) was decisively surpassed and the 50 Day EMA was threatened. Ultimately, the market appears to be attempting to complete a “falling wedge” pattern, suggesting that we may also see a modest rally from here. Nonetheless, keep in mind that the $100 level should present considerable resistance.
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The market will likely continue to see sellers at the first signs of tiredness; essentially, I believe sellers will enter and drive the market lower. The $90 level below should be supportive, as it is a huge, round, psychologically significant number and a region where we expect observe a great deal of volatility, but a break below there would open the door to a further $5 decline.