Last week the price of Brent crude oil significantly grew and closed above the important level of $35 per barrel.
According to experts, growth in the price is the result of market expectations of changes in the output structure for main exporting countries. However, at present the output keeps growing in countries such as Saudi Arabia and Iraq. In addition, after sanctions have been lifted from Iran its exports continue increasing as well.
Support and resistance
Bollinger Bands on the daily chart is moving up while the price range is widening, but the price remains above its upper border. MACD is growing and giving a strong buy signal. Stochastic reached its critical levels in the overbought zone and turning horizontally.
The indicators recommend waiting for clearer trading signals.
Support levels: 35.00 (local low), 34.00, 33.00, 32.66, 32.00 (27 January low), 31.00, 30.25, 39.50, 28.70, 28.07, 27.00 (20 January low).
Resistance levels: 35.85 (local high), 36.20 (local high), 37.00, 37.00, 38.33 (4 January high), 39.44, 40.00.
Long positions can be opened after the breakout of the level of 35.85 (with the appropriate indicators signals) with targets at 36.60, 37.35 and stop-loss at 35.20. Validity – 2-3 days.
Short positions can be opened after the breakdown of the level of 34.10 with the target at 33.00 and stop-loss at 34.50. Validity – 2-3 days.