Sep 18, 2020, 8:31:40 AM

Brent Crude Oil: oil prices are recovering

Current trend

Today, during the Asian session, oil prices are growing slightly, trading near local highs since September 4 around $43.45 per barrel. The instrument has been actively strengthening throughout almost the entire trading week, which allowed it to retreat from local minimums around $39.00 per barrel. Yesterday, the rate rose by almost 2%, supported by the weakening of the US currency and rather harsh statements by the OPEC+ chairman, who stated that any manipulations with the volume of oil production cuts under the relevant agreements were unacceptable.

The report from the US Department of Energy on oil and oil products reserves published this week also supported the quotes. For the week of September 11, US oil inventories fell by 4.389 million barrels after rising by 2.032 million barrels in the previous period. Analysts had expected an increase in inventories by 1.271 million barrels.

Support and resistance

On the daily chart, Bollinger bands are moderately declining. The price range is narrowing, reflecting the ambiguous nature of trading in the medium term. The MACD indicator is growing, maintaining a relatively strong buy signal (the histogram is above the signal line). Stochastic has approached its highs and signals that the instrument is strongly overbought in the ultra-short term.

The current readings of technical indicators do not contradict the further development of upward dynamics.

Resistance levels: 43.49, 43.90, 44.51, 45.00.

Support levels: 43.00, 42.32, 41.50, 40.89.

Trading tips

Long positions may be opened after the breakout of 43.90 with the target at 45.00. Stop loss – 43.30.

Short positions may be opened after a reversal at 43.49 and the breakdown of 43.00 with the target at 41.50. Stop loss – 43.80.

Implementation period: 2–3 days.