This week will prove crucial for world markets, including oil, as traders wait for European leaders to announce exactly how they intend to solve the debt crisis. All in all, there is a lot of optimism around. We hope that this time everyone will not be disappointed...

WTI increased by 3.1% for the week. A wave of optimism swept up WTI as economic data out of the USA surprised to the upside and a number of central banks announced a plan to provide dollar liquidity to the cash-strapped European debt system.

WTI formed a bullish “hammer” formation on 25 November and bounced from there, breaking easily above the psychologically important $100 level. Resistance is at $102.4 and $104. We believe the $102.4 level will be tested during the week. A break of the level will open the way to $104 and $105. Support is at $100. If $100 is broken on a close (unlikely in our view), $96 may be tested before the advance resumes.

We expect a range of $100-105 for the rest of the week.

The Rand gained 5% for the week after racking up massive losses in the previous four weeks. It looks like the Rand has now firmly broken back in to the R7.8-8.2/US$ range. The Rand gained as the US$ weakened after the announcement of the joint central bank plan to supply dollar liquidity, which increased risk appetite globally.

The Rand is setting up a “head & shoulders” formation, that if completed will see it strengthen by a further 50c/US$. We believe it is still early days to call such a movement and expect range trading in the R7.8-8.2/US$ for the week. However, a break of the R7.8/US$ level can see the Rand advance to R7.5 in a flash. We believe we can see at least R7.60/US$ before the end of the year.

We expect a range of R7.8-8.2/US$ for the rest of the week.

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