Tuesday, 25 Aug 2009

Crude Oil Tumbles on Profit Taking

The big story of the trading day was the tumbling price of crude oil. Black gold fell today by $2.75 or 5%. The driving force behind the plummeting price was profit taking as the commodity failed to breach a major resistance line. Traders began selling as the price of crude oil stalled at the psychologically important $75 mark.

The USD was down slightly against the EUR but up versus the GBP and the JPY as the major economic indicator released today was the CB Consumer Confidence Survey. The index handily beat expectations and provided a boost to the dollar and helped the greenback recoup some earlier lost ground against the EUR from this morning's European trading session.

As we move into this evening's trading session, traders will be wise to take advantage of the high volatility in crude oil prices. The unusual volatility could continue through tomorrow as traders will look towards the weekly Crude Oil Inventories report.