On Tuesday, the price of Brent crude oil continued declining amid quite favorable US macroeconomic releases, which allowed the USD to strengthen slightly, and the publication of the IEA oil market report.
According to IEA data, oil supply-demand balance is unlikely to be reached in 2016. Moreover, the oversupply may grow due to the Iranian oil export recovery, while the demand will decline amid the global economic slowdown.
Among positive statistics, which supported the USD, it is worth noting a growth of NFIB Business Optimism Index from 95.9 to 96.1 points against a forecasted decline to 95.6 points.
Support and resistance
Bollinger Bands indicator on the daily chart is directed horizontally, while the price range remains unchanged. MACD is declining and keeping a sell signal. Stochastic also continues moving down, but has already reached the oversold zone.
The indicators recommend waiting for clearer trading signals.
Support levels: 48.75 (13 October current local low), 48.35, 47.41, 46.80 (2 October low), 46.63, 46.00.
Resistance levels: 49.50, 50.00 (strong psychological barrier), 51.08, 51.50, 52.10, 53.00 (near 12 October local high), 53.50, 53.90 (9 October high), 54.16.
Short positions can be opened below the level of 49.15 with the target at 48.20 and stop-loss at 49.30. Validity – 1-2 days.
Long positions would become valid when the price turns up and overcomes the level of 50.00 with the target at 50.86 and stop-loss at 49.80. Validity – 1-3 days.