Brent (a 4-hour chart)
Oil prices managed to reverse a minor portion of their losses in the early trades on Wednesday. However, the recovery was limited due to doubts over OPEC deal non-compliance.
Oil prices found strong support at the level of 53.50 dollars per barrel. Being unable to break the handle the benchmark rolled back. The ongoing recovery could be attributed to some profit taking from bears following Tuesday's sharp sell-off. Brent oil prices were calm during the Asian session and accelerated their growth in the European one. The price was struggling with the 200-EMA which provided a solid support for the Brent in the 4 hours chart. The 100 was neutral, the 200-EMAs moved upwards while the 50-EMA headed south in the same chart. The resistance lies at 54.50, the support comes in at 53.50 dollars per barrel.
The MACD histogram decreased which indicates the sellers’ strength. The RSI indicator remained within the oversold territory.
We believe the market is overbought and vulnerable to a further downward correction. Brent may suffer more losses if the benchmark breaks below 53.50. Sellers may drag the price towards 52.50 dollars per barrel.