Review and dynamics
Last week, oil prices soared by 15% to the new highs for the past 5 weeks. On Monday, oil crude Brent has reached new record highs going up above $55.15 per barrel. However, today oil price has been declining for the second day due to profit taking and closure of the long positions. At the beginning of the European session on Wednesday, the price of Brent was near $53.60.
On the weekly and monthly charts the indicators OsMA and Stochastic give buy signals; on the 4 hour and daily charts the indicators give signals for short positions.
If the decline in price continues, short-term targets will be at support levels of 53.00 and 52.25. The decline in price below the levels of 51.10, 50.70, 50.00will be critical for the uptrend. In case of breakdown of the level of 50.00, the price will go back to support level of 48.00 (ЕМА200, ЕМА144 on the daily chart, ЕМА50 on the weekly chart).
Breakdown of the level of 46.20 (Fibonacci 50.0%) will trigger further decline with the targets of 43.65 and 41.70 (Fibonacci 38.2%). Breakdown of the level 41.70 (Fibonacci 38.2% and lows of July/August) may indicate the beginning of a new wave of decline in oil prices.
The rise in the USD and the existing excess of oil supply in the world will prevent the rise in oil prices. If there will be problems or difficulties in implementation of the OPEC agreement to cut oil production, oil prices may begin to decline.
In the case of uptrend, the price will go up to resistance level of 55.60 (ЕМА200 on the weekly chart).
Support levels: 53.00, 52.25, 51.10, 50.70, 50.00, 48.00, 47.00, 46.20, 44.30, 43.65, 41.70 and 41.00.
Resistance levels: 55.15 and 55.60.
Sell Stop: 53.20. Stop-Loss: 53.90. Take-Profit: 53.00, 52.25, 51.10, 50.70, 50.00 and 48.00.
Buy Stop: 53.90. Stop-Loss: 53.20. Take-Profit: 55.15, 55.60 and 56.00.
Indicators give SELL signals