Yesterday the price of Brent crude oil significantly grew after a publication of Crude Oil Stocks Change in the US for the last week of October that showed a larger than expected decline in oil reserves.
However, the major factor on the market remains the excess of supply. Furthermore, main oil exporters continue increasing their oil output, while the world economy growth is slowing, which all pressures oil prices.
Today attention needs to be paid to the GDP data for the third quarter in the US. If the data comes out poor that might weaken the USD and release some pressure from the price of oil.
Support and resistance
The price remains under strong resistance levels at 49.70 (ЕМА50 on the daily chart), 49.10 (ЕМА200), 48.85 (ЕМА144 on the 4-hour chart).
A breakdown of the level of 48.30 (ЕМА50 on the 4-hour chart) confirms a downward movement along the channel on the 4-hour chart towards 47.00, 46.00 (lower border of the channel), the breakdown of which would send the pair to 42.50 (year lows).
At the same time, a breakout of the level of 50.00 and consolidation above 51.00 would resume an upward trend.
On the 4-hour chart, OsMA and Stochastic are turning to sales. On the daily chart, Stochastic recommends purchases.
Support levels: 47.00, 45.25, 42.50.
Resistance levels: 48.85, 49.10, 49.70, 50.00, 50.50, 51.00.
Long positions can be opened from the level of 49.25 with targets at 50.00, 50.80 and stop-loss at 48.80.
Short positions can be opened after the price consolidation below the level of 48.10 with targets at 47.40, 46.50 and stop-loss at 48.40.