In early August, the oil price kept a downward momentum and reached the key support level of 70.70. Unable to overcome it, the instrument turned around, and at the end of last week, a new rising wave began to form.
This week, the momentum increased, and the barrel went up by more than $5 within a few trading days. The main growth catalyst was a significant increase in demand for oil due to a decrease in the level of US stocks (forecasted 2.7191 million barrels, actual value – 5.836 million barrels) and the fall of USD due to negative data on major indices and the US construction sector, and sharp criticism of President Trump in the international arena.
Today, special attention should be paid to Durable Goods Orders release.
Support and resistance
In the short term, the further decrease of USD is forecasted, due to which the oil price will continue to rise to the levels of 78.30, 79.50. The instrument is unlikely to grow above the current highs, and a long-term broad sideways consolidation is expected.
Technical indicators confirm the forecast for the formation of a sideways narrowing channel. On the daily chart, Bollinger bands are aligned horizontally, the MACD short positions’ volumes are reduced, and the signal line is near the zero one.
Resistance levels: 76.00, 76.35, 77.70, 78.30, 79.50, 80.50.
Support levels: 75.00, 74.00, 72.65, 71.50, 70.10, 78.75, 68.00.
It is relevant to increase the volume of pending short positions from the levels of 77.70, 78.30, 80.50 with the targets at 75.00, 72.65, 70.70 and stop loss 80.40.
Brent Crude Oil
|Entry Point||77.70, 78.30, 80.50|
|Take Profit||75.00, 72.65, 70.70|
|Support levels||68.00, 78.75, 70.10, 71.50, 72.65, 74.00, 75.00, 76.00, 76.35, 77.70, 78.30, 79.50, 80.50|
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