Reversal alert!
Brent crude oil has been cruising below a descending trend line since the middle of the month, but it looks like a breakout is brewing.
The commodity price has formed higher lows over the past few days, suggesting that bullish pressure is building up.
But what are technical indicators saying?
Brent Crude Oil (UKOIL) 1-hour Chart by TradingView
As you can see from the hourly chart above, the 100 SMA is still below the 200 SMA to reflect bearish vibes.
Not only that, but the 200 SMA is even close to the trend line resistance to add to its strength as a ceiling. This might be a tough one for oil bulls then!
Did I mention that Stochastic is inching closer to the overbought zone, too?
Turning lower might attract the attention of more sellers, forcing the downtrend to resume and taking UKOIL back to the recent lows.
So far, the energy commodity has been able to draw support from mostly upbeat PMI readings last week. If this optimistic business outlook lasts, investors could price in stronger demand for crude oil in the near-term and be able to sustain a bullish breakout.
In any case, wait and see how price reacts to the $83 per barrel area of interest to gauge where Brent crude oil prices are headed next.
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