Thursday, October 28, 2010
Bloomberg Analysis: Crude Oil Faces Resistance at $81.74 a Barrel
“This is the textbook definition of sideways trading, What are the markets waiting for?” the report said. “We are waiting for the FOMC meeting and its implication for the dollar before we place our bets.” The FOMC, which makes decisions on money supply and U.S. interest rates, is set to meet on Nov. 2 and Nov. 3. A decision to buy government securities, known as quantitative easing, may cause the dollar to decline against other currencies, increasing the investment appeal of commodities. The $78.40 a barrel level for crude is the 61.8 percent retracement from the $87.15 high for the year.
Futures for December delivery on the New York Mercantile Exchange traded at $82.13, up 19 cents, at 3:21 p.m. Singapore time. Prices have risen 3.5 percent this year. The Fibonacci sequence, identified by Italian mathematician Leonardo Fibonacci in the 13th century, is used by traders in financial markets to predict points of support and resistance.
Courtesy Bloomberg News
Bloomberg reporter Christian Schmollinger can be reached at firstname.lastname@example.org