20, October 2016

Brent (a 4-hour chart)

General overview

A fall in U.S. crude stocks together with a planned output cut next month support oil prices.

Current situation

Brent futures remained rangebound between the current support and resistance. Bulls pushed the price from the lower end of the range towards its upper one. Buyers moved Brent futures towards 52.50 dollars per barrel where the buying momentum faded. Oil prices bounced off the level and spent the European session slightly below it. The price stays in the 50-EMA region which provides a solid resistance for oil futures. The 50-EMA is neutral, the 100 and 200 EMAs are pointing higher. The resistance is at 52.50, the support comes in at 51.50 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 in a neutral area.

Trading recommendations

If the 52.50 dollars per barrel level can hold Brent futures could decline to 51.50. A clear strength above this immediate resistance will pave way towards 53.50.