2016-09-20 12:33:21

Review and dynamics
OPEC Secretary General Mohammed Barkindo said at the weekend that it is unlikely that any decisions will be made at the upcoming meeting of OPEC in Algiers on Wednesday.

Despite the decline in the USD in the market which started on Monday, the price of oil is also declining. It can happen due to anticipation of the two-day US Fed meeting, which starts today. Probability of the rate hike tomorrow is 12%. However, comments of the Fed’s officials may indicate possible increase in rate at the end of the year. This fact will be a positive factor for the USD and a negative factor for the prices of commodities and oil.

Last Friday's report of the US oilfield services company Baker Hughes showed the increase in oil rigs last week (416 units). At the beginning of today's European session spot- price of crude oil Brent has maintained at the level of 45.60.

Our opinion
On 4-hour, daily and weekly charts the indicators OsMA and Stochastic give signals for short positions; on the monthly chart the indicators are reversing towards sell positions too.

Despite the decline in the USD, oil prices are also declining. The demand which exceeds the supply of oil in the world once again becomes the main fundamental factor. The price has broken an important support level of 46.20 (Fibonacci 50.0% to the decline from $65.30 to lows of 2016 at the level of 27.05 and moving averages ЕМА200, ЕМА144 on the daily chart) and is now at the lower line of the ascending channel on the weekly chart.

It is likely that downtrend will continue. The price may return to the downtrend, which started in June. The last levels, preventing the fall in oil prices, are support levels of 43.65 and 41.70 (Fibonacci 38.2% and the lows of July/August).

As an alternative scenario the price can grow up to the levels of annual highs of 50.70, 52.80. This can be possible in case of the following conditions: if the US Fed leaves interest rate unchanged, if an agreement to freeze oil prices is reached at the OPEC meeting and the price returns to the ascending channel on the daily charts above the level of 47.60.

Support levels: 45.00, 43.65, 41.70 and 41.00.
Resistance levels: 46.20, 47.10, 47.60, 50.00, 50.70 and 51.00.

Trading tips
Sell on the market. Stop-Loss: 46.90. Take-Profit: 45.00, 43.65, 41.70 and 41.00.
Buy Stop: 47.20. Stop-Loss: 46.50. Take-Profit: 47.60, 48.50, 50.00, 50.70 and 51.00.

Indicators give sell signals
Indicators give sell signals

Breakout of the level of 46.20
Breakout of the level of 46.20