Last week, the price of Brent crude oil continued declining and reached new local lows of the month. The price is being pushed down by a growth of the USD, which gains support from macroeconomic indicators and statements of the US officials, which reiterate hopes of a rate increase before year-end.
At the forthcoming Fed meeting, due this week, the Regulator may give some hints, but there is still low probability that interest rates will be raised before the year is out.
Moreover, investors are waiting for US Oil Drilling Rig Count. From 12 to 16 October, the indicator declined by 8 rigs, and the negative dynamics may continue, thus, giving a moderate support to oil prices.
Support and resistance
Bollinger Bands indicator on the daily chart continues downward movement, while the price range is slightly narrowing down. MACD is declining and keeping a sell signal. Stochastic is trying to leave the overbought zone, thus, indicating a possibility of an upward correction.
It is recommended to wait for clearer trading signals.
Support levels: 47.32 (23 October low), 46.80 (2 October low), 46.63 (near 10 September low), 46.00.
Resistance levels: 48.00, 48.58 (22 October high), 49.00, 49.50, 50.00 (strong psychological level), 50.54 (16 October high), 51.08.
Long positions can be opened after the breakout and consolidation above the level of 48.50 with targets at 49.00, 49.90 and stop-loss at 48.20. Validity – 1-2 days.
Short positions can be opened after the breakdown of the level of 47.60 with targets at 47.20, 46.80 and stop-loss at 47.90.