Brent crude oil quotes have continued to rise this week and reached 3-week highs at a level of 59.45. The aggravation of the conflict in Yemen contributed to the growth. Saudi Arabia is being drawn into the confrontation between government and Houthi rebels supported by Iran, which may end in a full-scale regional war. Saudi government is determined not to allow Yemeni rebels to ascend to power as they would have access to the Red Sea and the Gulf of Aden, the main waterways for Saudi oil exports. This situation would weaken Saudi influence in the region, therefore the conflict is very likely to get aggravated and raise oil quotes.
Support and resistance
The market is currently under technical correction. A level of 56.75 (middle line of Bollinger bands) seems to be bears' probable target. In case this level is confidently broken, a level of 55.60 will be the next target. But the price is more likely to reverse and get back to its 3-week highs. Technical indicators indicate that the price will continue falling in the nearest future. Stochastic lines reversed downwards. The MACD histogram is in the positive zone and its volumes are decreasing.
Support levels: 58.00, 56.75, 55.60.
Resistance levels: 59.45, 62.00.
Short positions with a target at 56.75 opened at current price seem relevant to the situation. Pending buy orders should be placed at about 56.75. Fix profits at 59.45.