UKOIL 1D Chart Analysis, August 25, 2023
Will UKOIL remain in the descending channel?
Brent crude oil prices have fallen for almost two weeks as the global economy outlook remains uncertain. Increased oil exports from Iran and possibly lifting sanctions against Venezuela also contribute to the decline. OPEC+ may nevertheless limit price drop through additional production cuts.
On the technical side, Brent started an uptrend in late June. A signal on the MACD (vertical, purple line) on June 30th confirmed the trend reversal. However, it was then broken in mid-August and was preceded again by the MACD signal (vertical, orange line). Since then, the price has traded below the EMA9 most of the time, and its breakout resulted in the candle’s upper wick. Additional confirmation of the trend change may be the future intersection of EMA9 (blue line) and EMA50 (orange line), creating a death cross.
If the declines continue, the lower limit of the channel and Fibo retracements of 0.236 (84.33), 0.5 (79.98), and 0.618 (78.03) remain important levels to watch. Moreover, the first retracement is combined with the EMA50, increasing the chance of retesting it. For this scenario, the downside potential is around 3%.
Negation of declines should be expected when the candle closes above the upper limit of the descending channel. This should be confirmed by a crossover on the MACD signal.
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