The number of factors determined a fall in the price of Brent crude oil during last month.
Demand for energy is traditionally low during the summer time. Furthermore, a fall of the Chinese stock market significantly affected the price, as China is one of the leading energy consumers. The USD strengthening is another important reason.
On the other hand, oil reserves are fallingin the US and Saudi Arabia is planning to cut its production. Considering falling prices, big oil companies are cutting their spending that, in the medium-term, may also negatively affect oil supply. In addition, the decision to lift sanctions from Iran is not finalised, as the document has yet to pass the US congress.
Thus, a growth in the price is possible ifoil output drops and the Chinese stock market stabilises.
Support and resistance
The pair is trading within the downward channel but may correct towards its upper border (56.00) and resume its fall after.
Support levels: 52.65, 51.05, 50.00, 48.90, 47.70, 45.00, 43.70.
Resistance levels: 53.15, 53.90, 54.75, 55.35, 56.00, 56.75, 57.40, 58.70, 59.50.
Open long positions from the current levels and from 51.05 with the target at 55.70 and stop-loss at 50.65.
In the medium-term, place pending sell orders from the levels of 56.00, 54.75 with targets at 48.90, 47.70.