01, July 2016

Brent (a 4-hour chart)

Brent (a 4-hour chart)

General overview

The oil prices have shown the biggest growth since 2009 in the second quarter of 2016. The factors that supported the Brent were: a drop in the US production, forest fires in Canada and fighting in Nigeria and Libya. All these factors significantly reduced the surplus of the world market.

Current situation

The oil quotations stopped its recovery and corrected yesterday. The oil futures moved from the local high at 51.00 and reached the support at 49.50. The resistance is at 50.50, the support is at 49.50.

MACD moved into the positive area, its histogram decreased, that is a sell signal. RSI bounced from the overbought area. Shall RSI move upwards the Brent futures will grow, otherwise the price will decrease. The Moving Averages (50, 100 and 200) are below the metal on the 4 hour chart. The price broke all of them down after that it returned above of them. The price bounced from the 50-day moving on the daily chart.

Trading recommendations

We advise to short with the first target – 49.50. When the price consolidates below the first target, we can open deals to the level of 48.50.