Give the fundamental supply/demand situation, I still expect prices to be moving higher. But right now, we're seeing the standard issues of prices moving through a large number of technical resistance levels on their move higher, which is to be expected given the chart.After selling off about a month ago, prices have slowly moved higher. But they have encountered resistance as they have hit important technical levels such as Fibonacci levels and EMAs. Let's take a look at the charts:
The above chart shows that prices consolidated between 99 and 100, but then sold off yesterday.
Prices were in a rally and did move through the EMAs. However, notice the candles over the last few days -- the days when prices were above the EMAs -- were weak, indicating there was little demand pulling prices higher. Also note the strength of yesterday's bar moving lower, which was quite strong. Finally, the MACD is about to give a sell signal.
Yesterday, all speculative commodities took a hit as the markets started to seriously consider the possibility of a US default. Right now, this trumps the overall supply and demand situation. Should a default occur, expect prices to move lower, as a default will slow economic growth and thereby lower overall demand. However, if a default is avoided, expect the upward trajectory to continue.