On Monday, the price of Brent crude oil fell amid not so favorable macroeconomic releases both from China and the US. In the US, analytical agencies reported a decline in the total number of drilling rigs.
Macroeconomic statistics from China indicated that, in annual terms, Industrial Production grew by 5.7% in October which is significantly below the forecast of 6.0% and the previous reading of 6.1%. GDP growth slowed down from 7.0% to 6.9% in the third quarter that, however, was of no surprise.
Support and resistance
Bollinger Bands indicator on the daily chart is forming a sideways channel. MACD is declining and keeping a relatively strong sell signal. Stochastic remains near the border of the oversold zone.
Despite on the mixed signals, given by the indicators, the price is likely to continue declining because of a correction in the USD, which may develop as only a few US macroeconomic releases are due this week.
Support levels: 48.35, 47.41, 46.80 (2 October local low), 46.63, 46.00 (near mid-September lows), 45.00.
Resistance levels: 48.75, 49.50, 50.00 (important psychological barrier), 50.54 (16 October local high), 51.08, 51.50, 52.10, 53.00, 53.50, 53.90 (9 October high), 54.16.
Short positions can be opened at the current levels with the target at 47.00 and stop-loss at 49.00. Validity – 2-3 days.
Long positions can be opened when the price turns up near the current support levels with the target at 50.00 and stop-loss at 48.00. Validity – 2-3 days.