During the last two weeks, the price of Brent crude oil remains within a sideways channel between the levels of 47.00 and 50.25. The price consolidation is caused by the uncertainty regarding interest rates increase in the US.
The main pressure on oil comes from the output increase by the OPEC countries, strengthening USD and expectations of Iranian exports. On the other hand, due to low oil prices production in the US has fallen significantly. For example, the number of working drilling stations fell to its lowest since 2002.
At present, however, the main influence on oil comes from the USD dynamics.
This week, pay attention to the data from the US on labour market and oil reserves, as well as to the Fed Chair Janet Yellen speech. If data comes out worse than forecasts, the USD would fall and oil strengthen.
Support and resistance
The main scenario remains the price movement along the sideways channel towards the level of 50.25 (the upper border of the range and the key resistance).
Support levels: 47.30, 47.00, 46.50, 46.25, 45.00, 44.10, 42.95.
Resistance levels: 48.00, 49.00, 50.25, 50.80, 51.30, 52.10, 52.50, 53.50, 54.00.
Open long positions from the level of 47.95 with the target at 50.25 and stop-loss at 46.85.