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The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.
NEW YORK (
TheLFB-Forex) -- There are very few news wire headlines that are able to impact the current sentiment towards crude oil valuations. Price action continues the choppy and overlapping trading pattern that has found support, and is unable to break resistance, on West Texas Intermediate (WTI) trade.
The potential for new trade signals to form on Tuesday is weak, after the reversal to support on WTI (98.95) at 100.00 that was highlighted recently followed through to hit 98.00 support. The 100-day Simple Moving Average area at 99.50 has offered intra-day resistance, but the oil markets look disjointed in trade this week.
The outlook for
USO(USO) (39.00), the exchange traded fund (ETF) that tracks oil momentum, is for consolidation above 37.50, and to struggle to easily break 41.00 resistance. The ETF is likely to continue to lag behind the main moves seen in WTI futures contract trade, as major oil price action is taking place while the U.S. session is closed.
Any existing USO positions should be closely monitored while recent price action is absorbed. USO may struggle to offer a fair reflection of the choppy 24-hour moves currently being seen in crude oil futures trade, and a weekly chart close may offer some clarity.
Alternate 24-Hour Trade:
Investors who do not want to wait for their regional cash market to open, or do not have 24-hour access to the market they have open positions in, are able to access the 24-hour currency market. There is potential to analyze and trade currencies in a high-volume market that is supported by the global inter-bank system.
Investors can trade currencies in-line with a rising global market, or trade ahead of a falling cash market open. Being able to use currencies offers the opportunity to be in a trade before the regional market opens.
Traders could trade the currency pair EUR/USD in-line with the potential seen in global crude oil movement. Buying the U.S. dollar and selling the euro when WTI is dropping in value is a simple process of placing a sell order on EUR/USD, and then closing that same position in a similar way that equity trades would be managed.