Crude Oil fell further yesterday on rumors that Syria may give up chemical weapons to avoid a U.S. military attack. Prices fell from an European high of 109.0 to a low of 106.65 during early US session. Prices rebounded higher slightly when US session came on fully, most likely due to a combination of a technical rebound coupled with the bullish sentiment of US traders . However, price was still unable to break the 107.50 resistance, opening up the recent swing low as a bearish target. Bears received another boost this morning (9pm EDT) when President Obama announced that he would be pursuing diplomatic routes to resolve the situation in Syria. The Congress vote has been postponed, meaning that even in the event that diplomacy failed, we will not be seeing any military action in the next few months. Prices were sent quickly to 106.6+ once again, but the recovery was equally quick, suggesting that technical bulls are strong, or perhaps the non-military conflict scenario could already have been priced in/heavily discounted.
Technically, prices are currently within the consolidation range from 106.6 – 107.5 with a bull run towards the consolidation ceiling. Even though Stochastic readings are far from Overbought region, previous peaks give us precedence for a reversal around current levels, and thus lending strength to the ceiling and increase the likelihood of a move back towards the floor.
Weekly chart is bearish with price breaching the July/August consolidation, which opens up a move towards 103.0 floor. Stochastic readings agrees with the bearish outlook with readings looking likely to push below 80.0 for a proper bearish signal. If the bearish cycle proves to be correct, we could potentially see price moving beyond 103.0 and end up closer to 98.0 – 100.0 ceiling of the early 2013 trading range.
With Department of Energy inventory numbers coming out later, there is a chance that price may be able to break out of the short-term consolidation zone. However, if price continue to remain within the consolidation range despite a strong over/under expectation, the length of time spent within the consolidation zone may increases.
AUD/USD – Moves Through Resistance Level at 0.93 to Two Month High 
EUR/USD – Consolidates under short term Resistance at 1.3270 
GBP/USD – Within Reach of Three Month High near 1.5750 
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