The price of Brent crude oil continues falling.
Data on the EIA Crude Oil Stocks change that came out on Wednesday in the US showed an increase in oil reserves by 4.801 million barrels. Nonetheless, the price remains under pressure due to the excess of supply on the market. The OPEC meeting that finished in the beginning of the month represented an unwillingness of the cartel to reduce its production. In addition, supply is expected to increase in 2016 as exports from countries such as Iran, Indonesia that is returning into the cartel, and Libya will grow. At the same time, strengthening Dollar amid monetary policy tightening in the US will be increasing pressure on oil prices.
Support and resistance
On the 4-hour chart, the price broke out the upper border of a descending channel at the level of 37.20. A short-term upward correction towards the levels of 38.75 (ЕМА50 on the 4-hour chart), 40.00 (psychologically important level), 41.00 (upper border of the descending channel on the daily chart), 41.50 (ЕМА144 on the 4-hour chart), 42.30 (August lows, ЕМА200 on the 4-hour chart) is likely. In the medium term the fall will continue.
On the 4-hour chart, OsMA and Stochastic turned to purchases. On the daily chart, the indicators recommend sales but suggest that the downward pressure is decreasing.
Support levels: 36.40, 36.00.
Resistance levels: 38.00, 38.75, 40.00, 42.00, 42.30, 43.00, 44.00, 44.80.
Short positions can be opened below the level of 36.70 with targets at 36.40, 36.00 and stop-loss at 37.00.
Long positions can be opened from the level of 37.55 with the target at 38.75 and stop-loss at 37.20.