Crude Oil Forecast: Continues to Look for Some Kind of Direction – 28 February 2023
In the short term, it is likely that the Brent market will continue to view the $77.50 level as support, with the $90 level above acting as a significant resistance level.
During the trading session on Monday, the West Texas Intermediate Crude Oil market experienced a slight pullback, leaving traders on the lookout for any signs of momentum. Since November of last year, the market has been trading within a well-defined range, and it is unlikely that we will see a significant breakout any time soon. This situation can be challenging for traders, as it is difficult to find profitable opportunities in a market that lacks momentum.
As a result, it is important for traders to employ sideways and range-bound trading strategies in order to take advantage of the current market conditions. Seeking out a larger move in the market is currently unlikely to yield positive results, and traders should avoid pursuing such a strategy.
At present, most traders are taking a cautious approach to the market, as the global economic outlook remains uncertain. While demand for oil remains reasonable at current prices, it is unclear whether this will continue in the coming months. Many energy analysts believe that we will eventually see a surge in oil prices, but at present, there is little to indicate such a move from a momentum perspective.
The Brent markets are currently experiencing a period of range-bound trading, as there is a general lack of conviction on either side of the market.One of the primary factors contributing to this situation is the slowdown in the global economy, which is likely to have a negative impact on demand.Additionally, central banks around the world are tightening their policies, making it difficult to envision a scenario where risk appetite suddenly increases.While a market meltdown is unlikely, it is clear that there is currently little momentum to drive significant moves in either direction.
In the short term, it is likely that the Brent market will continue to view the $77.50 level as support, with the $90 level above acting as a significant resistance level. Traders should be aware that the 200-Day EMA is located just above the $90 level, and a daily close above this level could signal a shift in the market’s trend. Because of this, I think you are still looking at a short-term scenario more than anything else, but once we break out of these consolidation areas in oil, we could have a good $10 move.