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A bit of market optimism and risk-taking near the end of the year pushed crude oil prices higher near the end of 2022.

Has the party ended for the bulls?

I’m looking at Brent crude oil’s 4-hour chart for clues!

Brent Crude Oil (UKOIL): 4-hour

Brent Crude Oil (USOIL) 4-hour Chart

Brent Crude Oil (USOIL) 4-hour Chart by TradingView

Brent crude oil looks ready to break below an ascending channel support on the 4-hour time frame.

What’s more, it’s also testing the 100 SMA support that bulls and bears have been minding since the start of December.

Will the commodity extend a longer-term downtrend that started in mid-2022?

A clear break below the 100 SMA would confirm a bearish flag-like pattern and possibly drag UKOIL back to the 80.00 and 76.00 previous areas of interest.

I wouldn’t discount further upside moves though.

For one thing, the 100 SMA has already turned higher and is pointing to a bullish trend as it closes the gap against the longer-term 200 SMA.

Stochastic is also favoring the bulls with an oversold signal on the chart.

A bounce from the channel support could take UKOIL to the 88.00 previous highs if not new 2023 highs.

This week’s FOMC meeting minutes and U.S. jobs reports could provide clearer trends for the Black Crack. Updates that point to further tightening by the Fed would mean more growth slowdown, which is NOT what oil bulls want to hear when the IMF already warned about the U.S., Europe, and China experiencing lower growth this year.

Keep your eyes glued to the tube in case we see sentiment-changing news ahead of the anticipated economic releases this week!

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.