Since it dropped on Monday, the price of Brent crude oil is trading in a narrow range between $56.50 and $57.50 per barrel.
The fall was a result of the number of factors, namely: oversupplied markets, Greek crisis, world stock markets fall, investors running into safe-haven currencies (the Yen, USD, Frank), output increase by OPEC countries, probable increase of Iranian exports, and (possibly) coming up new world financial crisis.
The Fed yesterday was cautious about promised interest rates hikes this year, which is now even more uncertain.
The US stock indices fell amid Chinese stock markets rally. Dow Jones Industrial Average fell by 1.5% and closed at 2 February lows, S&P500 fell by 1.7%, and Nasdaq Composite lost 1.75%.
Despite futures rose during the Asian session, the pressure on the price is going to increase in the medium-term.
Support and resistance
The price broke down the support level at 58.00 and remains under fundamental factors pressure. After some consolidation, the fall is likely to continue. A correction is possible up to 59.00-59.50.
OsMA and Stochastic on the 4-hour chart support the possibility of price correction.
On the daily chart, the indicators give sell signals. The price is moving toward the lower border of the channel at 55.00, the breakdown of which would lead to a further fall towards 52.50 (March lows), 46.00 (2015 lows).
Support levels: 56.50, 55.00, 52.50.
Resistance levels: 59.00, 60.80.
Open short positions from the current levels and from 58.00, 59.00, 60.00 with targets at 55.00, 53.00 and stop-loss at 60.50. Recommendation length – until the end of the week.
Long positions can be opened after the breakout of the level of 60.80 with targets at 62.80, 63.90, 65.00, 68.60, 72.70.