On Friday, the price of Brent crude oil was declining actively and reached the level of $29 per barrel.
Downward dynamics resumed amid weak macroeconomic statistics from China which suggested China’s oil consumption might fall. The price was also under pressure as Iranian oil is expected to be back on the global market.
Last weekend the US and the EU lifted Iran’s “secondary sanctions”, and now the country might resume its oil exports, adding to an oversupply of the global oil market.
Support and resistance
Bollinger Bands indicator on the daily chart is directed down while the price range is widening. MACD keeps its strong downward trend and a sell signal. Stochastic is in the oversold zone and trying to turn up that indicates a possibility of an upward correction.
The indicators recommend waiting for clearer trading signals.
Support levels: 28.07 (18 January morning session low), 27.00, 27.50, 26.00.
Resistance levels: 29.50, 30.25, 31.00 (near 14 January high), 32.00, 32.50, 33.00, 34.00, 35.00 (6 January level), 35.85.
Long positions can be opened if the price turns up at the level of 28.00 (with appropriate indicators signals) with targets at 30.00, 31.00 and stop-loss at 27.50, 27.30. Validity – 2-4 days.
Short positions can be opened after the breakdown of the level of 28.00 with the target at 27.00 and stop-loss at 29.00. Validity – 2-3 days.