Last week, the price of Brent crude oil strengthened to its previous local highs amid the weakness of the US currency. Moreover, the oil market reacts positively to the escalation of the Syrian conflict which raises the risks of supply disruptions in the long term. At the same time, the situation in Syria diverts attention from Iran's intentions to increase its oil production.
Support and resistance
Bollinger Bands indicator on the daily chart is growing. The price range is widening actively, however, the price remains at the upper border. MACD is also growing and keeping a weakening buy signal. Stochastic is in the overbought zone and trying to turn down thus indicating a possibility of a downward correction.
The indicators recommend waiting for a clearer trading signal.
Support levels: 52.10 (current 9 October local low), 51.50, 51.08 (7 October low), 50.00 (strong psychological barrier), 49.13, 48.35, 47.41, 46.80 (2 October low).
Resistance levels: 53.00, 53.50, 54.16 (31 August high), 55.00, 55.73.
Long positions can be opened after the breakout of the level of 53.58 with the target at 56.00 and stop-loss at 52.70. Validity - 2-3 days.
A downward correction from the current resistance levels is a likelier scenario. Short positions can be opened from the level of 53.00 with the target at 51.00 and stop-loss at 53.60. Validity - 2-4 days.