2016-11-24 10:50:56

Review and dynamics
Victory of Donald Trump in the presidential election in the United States has triggered large-scale rise in the USD and the decline in commodity prices.

The price of crude oil Brent has broken down strong support levels of 47.15 (ЕМА200 on the daily chart) and 46.20 (Fibonacci 50.0% after the decline from $65.30 to lows of 2016 at the level of 27.00) and reached new local lows at the level of $43.60 per barrel last week.

However, recent news in mass media about possibility of successful outcome of the OPEC meeting in November resulting in agreement to cut oil production, has triggered sharp rise in oil prices in the past few days.

The price of Brent has again grown above the level of 47.15 approaching the levels of 50.00.

Our opinion
The rise in the USD and existing excess of oil supply in the world prevent the rise in oil prices.

The price of crude oil Brent remains in the range of 50.00 - 48.20 (ЕМА50 on the daily chart, ЕМА200 on 4-hour chart for the third consecutive day.

If the rise continues, the price may reach strong resistance levels of 50.00 (psychological level), 50.70 (Fibonacci 61.8% after the decline from $65.30 to the lows of 2016 at the level of 27.00) and 51.10 (highs of August). It is unlikely that the price will go above these levels due to the strong USD and the policy of the new US President Donald Trump, aimed at lifting restrictions on energy production in the United States.

In the case of decline and breakdown of the key support levels of 47.15 and 46.20 (Fibonacci 50.0%), the decline in price may continue.

Breakdown of the level of 41.70 (Fibonacci 38.2% and the lows of July/August) can trigger new wave of decline in the price of oil. This scenario will be possible after breakdown of support level of 48.20 (ЕМА200 on 4-hour chart).

On 4-hour chart the indicators OsMA and Stochastic give signals for short positions; on the daily chart the indicators suggest to open sell positions.

Short positions seem preferable. If an agreement to reduce oil production will be reached at OPEC meeting on 30 November, the price of oil will rise sharply to the annual highs above resistance level of 51.10.

Support levels: 48.20, 47.15, 46.20, 44.30, 43.65, 41.70 and 41.00.
Resistance levels: 50.00, 50.70 and 51.10.

Trading tips
Sell on the market. Stop-Loss: 49.50. Take-Profit: 48.20, 47.15 and 46.20.
Buy Stop: 49.50. Stop-Loss: 48.90. Take-Profit: 50.00, 50.70 and 51.10.

In the range of 48.20 – 50.00
In the range of 48.20 – 50.00

Above support level of 48.20
Above support level of 48.20