This week the price of Brent has jumped up. On Wednesday OPEC ministers decided to keep output quota at 30 million barrels a day. However, expected demand for crude oil will be 30.4 million barrels a day, which makes the quota insufficient.
Meanwhile, true trigger of the Brent rise is the conflict in Iraq. Islamist militants from Islamic State in Iraq and the Levant took over several cities and approached Iraqi oil regions. Investors are in panic and crude oil Brent goes up to the ten-month highs at 114.10.
Support and resistance
We expect small correction to the level of 111.80 (Fibonacci retracements of 61.8%). However, the price will continue to rise up to the levels of 114.00 and 115.50. Technical indicators give controversial signals. Bollinger Bands show a divergence, confirming upward trend. The price chart broke through the upper MA, promising certain correction. MACD histogram is in positive zone, its volumes are increasing. Stochastic lines have crossed in overbought zone and are turning down.
It is recommended to open short trades with targets at 111.80 as soon as the price breaks down the level of 112.80. Long trades with take-profits around 115.50 can be opened above 113.40.
Entry Point 112.80
Take Profit 111.80
Key Levels 111.80, 112.80, 113.40, 114.00, 115.50.
Entry Point 113.40
Take Profit 115.50
Key Levels 111.80, 112.80, 113.40, 114.00, 115.50.Publication source