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To cut or not to cut?

Brent crude oil (UKOIL) is hitting trend resistance levels ahead of OPEC+’s meeting next week!

Are we looking at an opportunity to jump on the Black Crack‘s downtrend?

Brent Crude Oil (UKOIL): 4-hour

Brent Crude Oil (UKOIL): 4-hour

Brent Crude Oil (UKOIL): 4-hour

If you’ve been watching crude oil prices, then you’ll know that the U.K.’s crude oil benchmark has been trading in a downtrend since mid-June when the Fed stepped up its tightening efforts and inspired concerns about global oil demand.

UKOIL encountered resistance at 124.00 and is now trading closer to the 88.00 psychological handle.

As you can see, 88.00 also lines up with the Fibonacci retracement of September’s downswing, a support zone from earlier this month, and a trend line resistance that hasn’t been broken since the downtrend started.

Will Black Crack extend its downtrend?

Keep in mind that oil prices are recouping some of its losses this week thanks to a weaker dollar and speculations that OPEC+ will announce production cuts in its meeting on October 5.

It also doesn’t hurt that Russia is reportedly lobbying for a 1 million barrels per day output cut instead of the 100,000 barrels per day decrease that markets are expecting.

Talks of less oil supply could bust UKOIL above the trend line and the SMAs on the chart.

Consistent trading above 90.00 could push the asset to previous areas of interest like 95.00 or 99.50.

But trends are traders’ friends until they bend.

Until we see enough momentum above the resistance zones that we’ve identified, traders will likely pay more attention to the 100 and 200 SMAs that still point to a downtrend.

Meanwhile, the bearish divergence on the 4-hour time frame can attract sellers as soon as the current consolidation breaks to the downside.

Will we see an upside breakout in the next trading sessions? Or will UKOIL start October below September’s lows?

This content is strictly for informational purposes only and does not constitute as investment advice. Trading any financial market involves risk. Please read our Risk Disclosure to make sure you understand the risks involved.