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.

Our opinion
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.

Trading tips
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.

Near 55.60
Near 55.60

Indicators give SELL signals
Indicators give SELL signals

Materials published on this page are provided by LiteForex for informational purposes only and should not be construed as investment advice or advice for the purposes of 2004/39/EC Directive. In addition, these materials have not been prepared in accordance with legal requirements designed to promote the independence of investment research and is not subject to any prohibition on the further distribution of investment research.

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