Today, UKOIL has seen a move to the upside from 70.88 to 71.75.
1 of the following 2 scenarios could occur:
- Scenario 1: (ideal scenario)
As price has re-entered the daily and hourly resistance region highlighted in a pink/purple box at the top. Price has previously rejected from this and on the 1H, there appears to be a pattern, giving way for some price action. On the 14 day , it seems to be oversold on both the 1H & 1D time frames. Additionally, looking back to November, this same resistance region acted as a support region for this pair, before snapping and paving the way for a huge sell-off. This gives space for a move to the downside. This would mean price could head down, ideally to the 61.8% of the tool, around 71.14 and then it could drop below. I would look for price to first move to the downside before considering any real targets, once 71.14 is taken out. We could really see price hit the red drawn, as it has been some time since it last melted down and bounced off that line.
- Scenario 2:
If the resistance region highlighted is broken, price could easily spike to the upside, towards 71.80 and beyond. I would recommend a tight stop loss just above the highlighted at the top. If price breaks the it has previously rejected from, this pair does have space to just rocket up.
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It does not look like we have the momentum now to push straight down to the 71.20s and below. I ended up catching a short from 71.70.