2016-08-11 12:26:36

Review and dynamics
Reports and news from the oil market have caused the decline in oil prices for the third consecutive day.

After yesterday’s data by the US Department of energy, showing the increase of oil reserves in the country, the price of crude oil Brent dropped by 1.4 USD by the end of the day. With the opening of today's trading session the price of Brent continues to decline; at the beginning of European session the price was at the level of 43.60USD per barrel.

Our opinion
The decline in prices in July has brought to naught growth in oil prices during two previous months. Now, the price is at the level of mid- April. Since the beginning of August the price of crude oil Brent has rebounded from support level of 41.70 (Fibonacci 38.2% to the decline from $65.30 to the lows of 2016 at the level of 27.05), and corrected to the resistance level of 45.65 (ЕМА200 on the daily chart).

On the weekly and 4-hour charts the indicators OsMA and Stochastic give signals to sell. On the daily chart the indicators also give signals for short positions after upward correct since the beginning of August.

In case of breaking out of the support level of 41.70, the nearest targets will be at the levels 36.05 (Fibonacci 23.6%), 32.30 and 30.00. If the price goes above 46.20 (Fibonacci 50%) oil price can go back to the level of 45.65.

However given existing fundamental factors, short positions are preferable.

Support levels: 43.40, 41.70, 39.00 and 36.05.
Resistance levels: 45.65, 46.20 and 47.30.

Trading tips
Sell on the market. Stop-Loss: 44.60. Take-Profit: 43.40, 41.70, 40.00, 39.00 and 36.05.
Buy Stop: 44.70. Stop-Loss: 43.10. Take-Profit: 45.65, 46.20, 47.30, 48.00, 49.00, 49.40, 50.00 and 50.70.

Rebound from 45.65
Rebound from 45.65

In the descending channel
In the descending channel