Technical analysis of UKOIL
Brent’s retracement seems to have halted for now in the area of $41.50. Click on the image to magnify. The most important fundamental factor so far this week was China’s NBS manufacturing PMI this morning. The figure came in at 50.9, beating both the previous figure and expectations and suggesting slightly higher growth in June, the fourth successive month of modest growth. This technical analysis of UKOIL looks at some key areas for the rest of the week and upcoming data which might lead to movements.
High resistance here is likely to be the round number of $44. Low support meanwhile is probably the latest low around $37.50. Neither of these areas is likely to be tested in the immediate future though unless there’s a significant change in sentiment over the next few days. Instead, areas based on moving averages could be more important.
Technical indicators on UKOIL H4
Moving averages continue to print a buy signal, with each of the 50, 100 and 200 SMAs successively above the slower lines. The 50 SMA from Bands has also widened the gap slightly with the 100 since last week. The first key support from moving averages is the 50 SMA which price is currently testing. Below this, the 100 SMA slightly below $41 could be a key support. The 200 SMA is too far down at the time of writing to be in clear view as a support, but it could act as a barrier if there’s a deeper retracement later in the week.
Bollinger Bands (50, 0, 2) have contracted somewhat since the second half of last week. This would usually suggest ongoing consolidation and relatively lower volatility. There’s no indication of overbought from Bands, but the slow stochastic (15, 5, 5) at about 82 is within the zone of buying saturation. Volume remains a bit lower this week although buying volume is still considerably higher than selling, indicating the possibility of ongoing gains.
The two recent attempts to push significantly below the 100 SMA and possibly the crucial psychological zone of $40 seem to have been rejected conclusively for now. Note the large bodies of the up candles coming after these attempts. On the other hand, there’s also little clear demand to push up beyond $41.50. This zone had been a resistance two weeks ago. Price action generally seems to back up the impression of consolidation.
Key fundamental events
Probably the biggest fundamental news for oil this week is tomorrow morning’s Caixin manufacturing PMI for June at 1.45 GMT. The consensus of 50.5 is slightly lower than May’s 50.7, but if this morning’s comparable release is anything to go by it’s possible that a positive surprise is in store.
Apart from this important figure, traders are awaiting regular stock data from the USA this week. The EIA’s crude oil stocks change tomorrow at 14.30 is the key figure, but the API’s equivalent later today and Baker Hughes’ oil rig count on Friday night could also generate some movement on this chart. For more information on these, check out Exness’ economic calendar or MT5’s built-in calendar.
Technical analysis of UKOIL: summary
TA suggests that Brent could continue to trade around $41.50 for the next few periods. A breakout to the upside (which might be a result of good data) is possible later in the week, but traders would need to monitor saturation from both the stochastic and Bands in such a situation.
Thank you for reading Exness Education’s technical analysis of UKOIL! Please join us again on Thursday for more TA and on Monday for our weekly preview of data. Don’t forget that you can ask us to write about a symbol here by leaving a comment on Facebook.