27, June 2016

Brent (a 4-hour chart)

Brent (a 4-hour chart)

General overview

As expected, the decision of London to leave the European Union made the oil futures drop. The crude oil Brent decreased as investors decided not to take risks and took their funds away from risky assets.

Current situation

The oil quotations decreased and lost about 6% on Friday. However the situation seems to have stabilized and the oil futures found a support at 47.50. The Brent recovered by the end of traders and ended the week at the mark 48.50. The resistance is at 48.50, the support is at 47.50.

MACD moved into the negative area. The histogram decreased that is a sell signal. RSI is near the oversold level. If RSI declined that will be a sell signal. Shall it bounce upwards and the futures will recover. The Moving Averages (50, 100 and 200) are above the price.

Trading recommendations

Oil prices are currently under pressure due to a variety of factors. The dollar strengthened, the market is still overvalued, and there are signs of renewal in the US shale oil production. The Brent can drop further but not too far. We believe the instrument will find a bottom at 45.00. If the pair breaks the level 49.50 upwards that will be a buy signal.