U.K.’s crude oil prices are trading a short-term uptrend!
As you can see, Brent crude oil prices have been showing us higher highs and higher lows since breaking a consolidation two weeks ago.
UKOIL is now ranging between 85.75 and 86.75, which isn’t surprising since the area is just above the 200 SMA on the 1-hour time frame and a key resistance back in December.
More notably, the 86.00 zone also lines up with an ascending channel support that’s been around since the start of the year.
Brent Crude Oil (UKOIL) 1-hour Chart by TradingView
Can the commodity maintain its bullish momentum though?
The simple moving averages certainly point to more buying as the 100 SMA remains above the 200 SMA support.
Economic themes are also favoring more risk-taking.
Expectations of slower tightening by the Fed are weighing on the U.S. dollar’s value, which means that oil bulls can buy more supply with their moolah.
A report from EIA earlier this week also showed less stock increase than markets had expected.
Last but not the least is the risk-friendly theme in the markets at the start of the year and amidst China’s reopening plans.
Continued USD-selling and risk-taking could extend Brent crude oil’s prices.
UKOIL could break higher from its short-term consolidation and revisit its January highs near 89.00.
But if markets focus on global recession concerns or profit-taking from recent rallies, then UKOIL could start trading below the 200 SMA.
A clear breakout below the 200 SMA and ascending channel opens the asset to a drop back to its 83.00, 80.00, or 78.50 previous inflection points.
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