Potential China reopening is supporting the price of oil
The primary trends for UKOil and USOil are starting to show signs of strength. Both charts have charted a higher trough (HT). This price action sets up a platform for a higher peak (HP), which would be bullish. Moreover, their stochastics have started moving up. I.e. the downward momentum that has been present since June has waned.
If the HP charts, oil will be in an uptrend. Moreover, if the stochastics makes their way to the upper quintiles, an underlying bullish momentum will be present on a primary trend basis.
There is optimism that China will reopen from their strict Covid policy. Given that it is the 2nd largest energy consumer, this will be significant. An unverified note on social media suggested that a "Reopening Committee" had been formed. With the OPEC+ cuts, this may catalyse further price appreciation and a higher peak.
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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