2016-08-15 13:01:29

Review and dynamics
At the beginning of August the price of crude oil Brent rebounded from the 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).

Last Friday, the USD fell sharply on the weak data on retail trade. However, at the end of the trading day the USD managed to regain most of the losses. The price of oil continued to rise, despite the release of report of the company Baker Hughes indicating that the number of active rigs in the USA rose by 15 units, reaching the number of 396 last week.

The price of crude oil Brent has broken down the key resistance levels of 45.65 and 46.20 (Fibonacci 50.0%) and slightly grew up today.

Our opinion
The rise in oil prices is supported by the expectations of the positive outcome of OPEC meeting scheduled for late September. However, there is still oversupply of oil in the world and the USA. Breakdown of the levels of 45.65 and 46.20 may be false. Based on the fundamental factors, oil prices can quickly fall below these levels and reach support levels of 43.65 and 41.70.

In case of breaking out of the support level of 41.70 the price can go to the levels of 36.05 (Fibonacci 23.6%), 32.30 and 30.00.

An alternative scenario suggests the rise in price to the resistance levels of 50.00 and 50.70 (Fibonacci 61.8%, the highs of July and May).

However, fundamental factors suggest that short positions are preferable. Although the indicators OsMA and Stochastic on the daily chart recommend to open long position, traders shall be careful when placing buy orders. On the daily chart Stochastics is in overbought zone. On 4- hour chart the indicators are reversing towards the short positions. The price is at the upper line of the ascending channel. The pair can break out the limit of the channel and go down.

Support levels: 46.20, 45.65, 43.65, 41.70, 39.00 and 36.05.
Resistance levels: 47.60, 48.00, 50.00 and 50.70.

Trading tips
Sell on the market. Stop-Loss: 47.70. Take-Profit: 46.20, 45.65, 43.65 and 41.70.
Buy Stop: 48.10. Stop-Loss: 47.30. Take-Profit: 49.00, 49.40, 50.00 and 50.70.

Stochastic is in the overbought zone
Stochastic is in the overbought zone

Rebound from the upper line of the channel
Rebound from the upper line of the channel