News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
Wall Street
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
More View more
Real Time News
  • Forex liquidity makes it easy for traders to sell and buy currencies without delay, and also creates tight spreads for favorable quotes. Low costs and large scope to various markets make it the most frequently traded market in the world. Learn more here: https://t.co/arxYmtQeUn https://t.co/4qxwiJsV1K
  • Forex quotes reflect the price of different currencies at any point in time. Since a trader’s profit or loss is determined by movements in price, it is essential to develop a sound understanding of how to read currency pairs. Learn how to read quotes here: https://t.co/CNtqrKWDBY https://t.co/stMPuq0VXR
  • A currency carry trade involves borrowing a low-yielding currency in order to buy a higher yielding currency in an attempt to profit from the interest rate differential. Find out if the carry trade suits your trading style here: https://t.co/7t4BzmLg8w https://t.co/v6RGICQvge
  • Get your snapshot update of the of top level exchanges and key index performance from around the globe here: https://t.co/d8Re5anlG5 https://t.co/rws9LHJV3E
  • RT @FxWestwater: Japanese Yen Forecast: JPY Crosses Eye BoJ, CPI as Haven Flows Bolster Yen Strength Link: https://www.dailyfx.com/forex/fundamental/forecast/weekly/jpy/2021/09/18/Japanese-Yen-Forecast-JPY-Crosses-Eye-BoJ-CPI-as-Haven-Flows-Bolster-Yen-Strength.html?CHID=9&QPID=917708&utm_source=Twitter&utm_medium=Westwater&utm_campaign=twr https:/…
  • Traders utilize varying time frames to speculate in the forex market. The two most common are long- and short-term-time frames which transmits through to trend and trigger charts. Learn more about time-frame analysis here: https://t.co/9S5tXIs3SX https://t.co/FVisZuTP6M
  • Stocks appear to be in a corrective phase but could get put to the test; levels and lines to watch in the days ahead. Get your weekly equities forecast from @PaulRobinsonFX here: https://t.co/H1BaTlIHjY https://t.co/zP3mjfslSD
  • Currency exchange rates are impacted by several factors. Are different world leaders a contributing factor? Find out here: https://t.co/4jsORznRTE https://t.co/Of1thU4zXw
  • Further your forex knowledge and gain insights from our expert analysts on AUD with our free guide, available today: https://t.co/p2FhEwym1E https://t.co/MjiYB85TSF
  • Many people are attracted to forex trading due to the amount of leverage that brokers provide. Leverage allows traders to gain more exposure in financial markets than what they are required to pay for. Learn about FX leverage here: https://t.co/BdgFmkRxVw https://t.co/fIO9TP7D62
How to Trade the  Oil Triangle Breakout

How to Trade the Oil Triangle Breakout

Gregory McLeod, Currency Analyst

Talking Points:

  • UKOil chart has recently broken outside a triangle
  • Geopolitical tensions may disrupt oil supplies
  • A global economic recovery could continue to put upward pressure on oil prices

When traders can combine a strong fundamental picture with solid technicals, solid trading setups can be found. Such a case exists for UKOil as the bullish fundamental backdrop aligns itself with triangle price pattern technical setup.

After 6 years of economic malaise, the global recovery seems to be gaining traction. With recovery comes the demand for energy resources. Most notably, rising oil demand is putting upward pressure on price. However, this increased demand comes at a time when global oil production has been down. At the same time, renewed hostilities in Libya combined with heightened tensions between Russia and the Ukraine threaten to disrupt supply applying further upward pressure on oil price.

Since hitting a high of 112.37 on 3/3 2014, UKOil has dropped 7.5%. Since that low of 103.94 that was hit on 4/2, UK Oil has been battling back. While still under the shadow of a daily downtrend line, UKOil had been consolidating within a triangle price pattern in the 107.00 area. The convergence of a downtrend line with an uptrend line forms the borders of triangle consolidation pattern similar to the one that was formed on GBPUSD

Learn Forex – UK Oil Daily Chart

How to Trade the  Oil Triangle Breakout

(Created using FXCM’s Marketscope 2.0 charts)

In the daily UKOil chart above, notice how initially price was turned back from the red downtrend line on the first attempt. On the other hand, higher consecutive swing lows continue to demonstrate the strength of the bulls. Later, UKOil’s second attempt successfully took out the trend line and we have the makings of a powerful breakout.

Using the Relative Strength Index (RSI), an oscillator that tracks momentum, traders can see that a reading above the 50 supports further UKOil upside. In addition, levels of resistance and support can be drawn on the daily chart using recent swing highs and swing lows. The black horizontal lines can be used to place trades near support as well as profit taking levels like in the example below. You can read about the basics of trading support and resistance here.

Learn Forex – UKOil Hourly Chart with daily Support and Resistance

How to Trade the  Oil Triangle Breakout

(Created using FXCM’s Marketscope 2.0 charts)

A Real Time Example: UKOil Hourly Chart

Moving down from the UKOil daily time frame to the hourly we can see price structure in more detail. By carrying upper time frame support and resistance levels down to the hourly, we can pinpoint entries and exits. In the example above, I entered long at 108.03 just above the red downtrend line and the psychological 108.00 area. Price move to the 3/28 daily high of 108.36 then moved to the 3/7 high of 109.07 before pulling back. I took profits just shy of that level at 108.77 for a quick 74-cent move.

So what’s left?

The gusher in UKOil may not be finished. A break above the 3/7 resistance high could open a fast path to the 112.34 3/3 resistance high. This would be a $3.00 move in UKOil. A move back below the 107.00 area could lead to a retest of 104.00 area and invalidate this bullish scenario. With strong demand, warmer weather, and low supplies, this may be a ‘perfect storm‘ for oil bulls.

---Written by Gregory McLeod Trading Instructor

This article showed you how to identify potential areas of strong support and resistance in the form of yearly pivots. To extend your knowledge take this free interactive video tutorial on the RSI indicator. RSI can be used with pivots to pinpoint entry levels. You will be asked to sign the Guestbook which will give you a Universal Access Pass to other free Forex lessons.

Watch Greg McLeod at 9:30 ET in the DailyFX+ Live Classroom

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES