UK oil prices are trending upwards in the short term!
As you can see, Brent oil has made new highs and lows since breaking the consolidation two weeks ago.
This is not surprising as UKOIL is currently in the range between 85.75 and 86.75, just above the 200 SMA on the hourly timeframe, a key resistance in December.
More notably, the 86.00 zone also coincides with the support of the ascending channel that has been present since the beginning of the year.
But can commodities sustain their bullish momentum?
The Simple Moving Averages show that the 100 SMA is above the 200 SMA support, which will definitely lead to more buying.
Economic themes also support more risk-taking.
Expectations of a slowing pace of tightening by the US Federal Reserve (Fed) are weighing on the value of the US dollar, meaning oil bulls can buy more supply in Mugla.
An EIA report earlier this week also showed that inventories increased less than the market expected.
Last but not least, the risk-friendly theme we saw in markets earlier this year and during China’s reopening plans.
Continued US dollar selling and risk taking could push Brent oil prices higher.
UKOIL may rise further from the short-term consolidation and revisit January highs near 89.00.
However, UKOIL could open below the 200 SMA if the market turns its attention to global recession fears and profit-taking from the recent rally.
A clear breakout below the 200 SMA and the ascending channel returns the asset to the previous inflection point of 83.00, 80.00 or 78.50.
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