Can Brent crude oil (UKOIL) bust out of a consolidation?
Or will the commodity slide down the charts in the next trading sessions?
In case you missed it, risk-friendly assets like commodities and commodity-related currencies have been having a good week as markets priced in the major central banks not being as hawkish as they were last year.
Brent crude oil, which hit lows near $75.75 in December, has gone up all the way to its current $86.00 levels.
Can Black Crack maintain January’s bullish momentum?
Brent Crude Oil (UKOIL): Daily
A couple more risk-friendly trading sessions could take UKOIL above the $87.00 psychological handle that serves as the resistance of an ascending triangle on the daily time frame.
What’s more, a sustained upside breakout would mean that the commodity would be trading above the 100 SMA. That hasn’t happened since July 2022!
I wouldn’t discount another rejection at the technical resistance though.Take note that the risk rally has been supported by global growth optimism and speculations of less hawkish central bank policies.
But this week’s U.S. earnings releases have shown mixed results; the Bank of Japan (BOJ) has shot down “pivot” narratives by keeping its policies unchanged, and more companies are announcing layoffs.
Maybe this week’s EIA oil stocks data can lead to a convincing breakout or rejection for UKOIL?
Higher-than-expected crude oil supplies can fuel global growth concerns can get the attention of those who are already paying attention to Brent crude’s technical resistance levels.
UKOIL could dip back to its trend line support near the $80.00 psychological level.
But if risk-taking continues to be the name of the game, then UKOIL could see an upside breakout.
Look out for a trip back to the $90.00 or even the $95.00 levels if there’s enough bullish momentum!
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