14, October 2016

Brent (a 4-hour chart)

 General overview

Brent prices decreased after the OPEC report that output levels reached eight-year high. According to AIP US crude inventories rose in the week to October 7.

Current situation

Brent prices extended the downside in the Asian session on Thursday. However, the 51.50 support limited its further weakness, the price bounced off the level and reverted some of its early losses at the beginning of the European session. Brent futures remained in the upward middle-term channel, close to its lower limit. Despite the three-day decrease the price is still in the green figures. The 50-EMA failed to stop the further weakness of Brent prices, the price mobbed lower.  The moving averages keep heading higher with the 50 and 100 EMAs crossing the 200-EMA. The resistance is at 51.50, the support comes in at 50.50 dollars per barrel.

MACD indicator is at the centerline. If the histogram enters the negative territory, that will indicate sellers’ growing strength. If MACD returns into the positive area the buyers will take control over the market. RSI is within the neutral area.

Trading recommendations

Oil prices may extend the recovery towards 52.50. Conversely, a downtrend will start as soon, as Brent drops below the support level 51.50.