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UKOIL (Brent) has continued printing lower lows Since UKOIL printed its May 20th high at $126.51 As we move down the graph a price channel becomes apparent with firm lines of support and resistance. Price is currently testing resistance near 112.50. Support currently resides at lower lows near 93.60. Traditionally oil markets will follow basic fundamental analysis. When economies are booming and industry is doing well, oil comes into high demand driving up prices. Conversely, as economies and business slows oil prices tend to decline. Next week on the economic calendar events such as German production numbers and the BOE rate decision will give us more insight into the state of world economy.
Taking Price in to a 2Hour chart we can utilize the Stochastics indicator to find entry signals. We are looking for the %S line to cross over our %D line signaling an opportunity to trade with the trend. Our signal is optimal as currently both lines ( %S & %D ) are residing above the overbought level of 80. A break below this point also can be used as a signal of bearish momentum. 
My preference is to sell UKOIL on a stochastic crossover above our overbought line , near a price of 110.50. Limits should look to first target 106.50, then an extension at 95.50. Stops should be placed at 112.50 for a clear 1:2 Risk/Reward setting. Alternative scenarios include price breaking through resistance for a new bull run in UKOIL. Additional Resources Support and Resistance Video Trading Breakouts Identify the Trend ---Written by Walker England, Trading Instructor To contact Walker, emailwengland@fxcm.com. Follow me on Twitter at @WEnglandFX. To be added to Walker’s e-mail distribution list, send an email with the subject line “Distribution List” to wengland@fxcm.com. DailyFX providesforex newson the economic reports and political events that influence the currency market. Learncurrency tradingwith a free practice account and charts from FXCM. 
After finding support and resistance, we can now begin to look for entry’s on our channel. Adding the SSD Indicator (Slow Stochastics) with a 15, 5, 5 setting can be useful for finding shifts of momentum. Traders looking to buy the GBP/AUD will look for the %K line to close above the %D line. For more on this oscillator read, Stochastic Crossovers , linked here. 
My preference is to buy the GBP/AUD using conformation from the SSD indicator. Entrys should be placed as near resistance as possible at 1.5450 or better. Stops should be placed 200 points away outside of resistance at 1.5250. Limits should look to first target half the channel at 1.5850 for a clear 1:2 Risk/Reward setting. Secondary limits may be placed at the channel high at 1.6250 Alternative scenarios include price breaking through support and moving on to new lows. Additional Resources Support and Resistance Video Trading Stochastics Video Chart Patterns and the Trend ---Written by Walker England, Trading Instructor To contact Walker, email wengland@fxcm.com. Follow me on Twitter at @WEnglandFX. To be added to Walker’s e-mail distribution list, send an email with the subject line “Distribution List” to wengland@fxcm.com.