UKOil retraces after hitting a high of $133/barrel last week

  • UKOil

In a previous article, we asked whether last week's gap open for oil was a runaway or an exhaustion gap? Below we consider the 4-hour chart of FXCM's CFD for Brent, UKOil. It seems to be of the exhaustion variety, as it has now closed. Moreover, we have included a triple moving average to gauge current sentiment. The green shorter-term moving average (SMA) is below the orange intermediate SMA, and the orange intermediate SMA is below the red longer-term SMA.

We also note that the red SMA has turned down (black ellipse). This formation is bearish. As long as it holds, the momentum is biased to the downside, and stagflation fears diminish. However, this is highly dependent on the geopolitics surrounding the Russian invasion of Ukraine. The two countries are due to resume peace talks, and any escalation is likely to disrupt the downside flow of the SMAs. Ukraine is looking to secure a cease-fire and the withdrawal of Russian troops from its territory.

Russell Shor

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.


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