Oil capitulated in 2022, but recent price action shows accumulation. This, on the back of potential positives, should support energy prices.
UKOil and USOil have both charted a higher trough (HT), followed by a higher peak (HP). The weekly patterns suggest the primary trend is up. Optimism that global macroeconomics are improving, with disinflation followed by a more moderate pace of Fed rate increase, are contributing.
China is also reopening. This has unleased demand. It has also opened its international borders, providing a further tailwind.
The test for UKOil and USOil is a question of momentum. A stochastic movement to the 80+ levels (green rectangles) will be a bullish development, suggesting that the uptrend may have legs.
Senior Market Specialist
Russell Shor joined FXCM in October 2017 as a Senior Market Specialist. He is a certified FMVA® and has an Honours Degree in Economics from the University of South Africa. Russell is a full member of the Society of Technical Analysts in the United Kingdom. With over 20 years of financial markets experience, his analysis is of a high standard and quality.