Brent: general review
The price of Brent has been growing since the beginning of this week. Yesterday, Brent had reached 2-month highs at the level of 110.66; however the “bulls” were not able to consolidate above this level so far. In addition to the geopolitical factor, crude oil Brent is supported by the Chinese news that preliminary index of industrial activity has grown up to 49.7 points in May, which is the highest level for the last 5 months. The price of oil was also supported by the minutes of the US Fed meeting, which were released on Wednesday. The minutes have confirmed that interest rates will remain at the previous levels. The data on housing sales in the USA, which is scheduled for the release today (17:00 GMT+3), will be of investors’ interest.
Support and resistance
Brent is trading at the high levels and the “bulls” need strong fundamental support in order to raise the rate to the higher level. On the four-hour chart Bollinger bands are diverging, indicating upward movement. The price has broken down the upper line, which suggests possibility of corrective movement to the level of 109.70. MACD histogram is in the positive zone; however its volumes are decreasing. It is likely that the instrument will continue to trade in the range of 109.70-110.66.
Support levels: 110.25, 109.60, 108.95 and 108.00.
Resistance levels: 110.66, 111.00 and 112.00.
It is advisable to open short positions at the current price with the nearest target of 109.70. Buy positions can be opened in the upward correction from the support level of 109.70.
Analyst of LiteForex Investments Limited