UKOUSD (Brent crude) on a daily timeframe. The chart shows that after a prolonged downtrend from around $90 to below $60, prices have recently surged above multiple moving averages (MA50 in green, MA100 in blue, MA200 in yellow), breaking through resistance at $68.6 and $72.4, and currently stalling just above the $75.8 level.
Over the past few weeks, the price has rallied sharply—gaining over 15–20%—driven by a breakout above the MA200 ($72) and a push into the $75–76 zone. The strong volume accompanying the breakout suggests that this is a meaningful reversal rather than a short-lived spike.
Momentum indicators reflect the bullish tilt: RSI is in overbought territory above 70, near 71, and the Stochastic oscillator is also firmly in overbought regions, though showing a slight flattening. This suggests upside momentum is strong, but caution is warranted for possible consolidation or pullback. The ATR has increased, indicating heightened volatility.
The main scenario: consolidation in the $74–76 band is likely as momentum digests. A successful retest of the MA200 (72) or the $72.4 level could pave the way for a renewed rally. If bulls remain in control, a breakout above $76 could target the next resistance at $80.9, with secondary resistance at $84.4.
Alternative scenario: exhaustion at current highs could trigger a deeper pullback toward the $72–73 range, testing confluence with the MA200 and previous breakout level. If that fails, a drop to the prior resistance-turned-support at $68.6 is possible. A breach of $68.6, especially on strong selling, might shift the trend back to bearish, targeting $65 and lower.
Recent fundamental drivers: escalating Israel–Iran tensions—including strikes and threats targeting the Strait of Hormuz—have added a significant risk premium, pushing Brent to near four-month highs.
Concerns over regional supply disruptions through the Strait have prompted price swings up to nearly 10% in days. However, analysts from Goldman Sachs and Citi warn that unless the Strait is closed, structural oversupply from OPEC+ production cuts unwinding and robust non‑OPEC supply growth could limit upside later in the year.
Looking ahead this week, key drivers include any flare‑ups in Middle East tensions (and potential disruptions to shipping in the Strait), OPEC+ supply updates, and economic data that might influence demand forecasts or monetary policy reactions to inflationary pressures from energy.
Summary:
- Brent crude blasts 15–20%, smashing through major resistance at $68.6, $72.4, and $75.8 with a clean MA200 breakout.
- RSI and Stochastic hit overbought levels—bullish firepower strong but a pullback could be brewing.
- Middle East tensions near the Strait of Hormuz pump up risk, sending volatility and prices soaring.
- Watch for a key battle between bulls and bears at $72–73 support or a breakout push toward $80 and beyond.
