The EU is having trouble banning Russian oil.
Will this lead to crude oil futures falling from their current resistance levels?
Here’s a setup that I’m looking at:
Brent Crude Oil: 4-hour
Higher demand, the lack of a foreseeable peace agreement between Russia and Ukraine, and the EU possibly banning Russian oil raised U.K.’s crude oil prices from $101 to the $115 mark within a week.
The commodity has found resistance at $115, though, which isn’t surprising since the area has been limiting the bulls’ game since late March.Will the range resistance hold for another day?
Take note that UKOIL has popped up a doji around the $115 zone and it looks like the indecision will be followed by a red candlestick.
But wait, there’s more! Stochastic is also showing a bearish divergence on the 4-hour chart which could attract more sellers in the next trading sessions.
Oil bears can take advantage of the $115 resistance holding (so far) and Hungary holding up the EU decision to ban Russian oil.
Momentum below $115 could lead to a retest of the mid-range levels near $108 where the dynamic moving averages are also hanging out.
If the EU succeeds in banning Russian oil, or if traders get over their risk aversion, then we could see crude oil futures break above their current ranges and head for their 2022 highs. Yipes!
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