On Tuesday, the price of Brent crude oil was growing and managed to strengthen above the level of $31 per barrel. Analysts suggest the price gains support from a decline in demand for the US Dollar ahead of the Fed monetary policy meeting as well as from expectation of a decrease in oil production.
More and more OPEC member countries might be ready to become more flexible in order to achieve balance in oil production. However, experts still believe oil prices will not rise above $35-38 per barrel in the first half of 2016. The World Bank also cut its 2016 forecast for crude oil prices by $14 to $37 per barrel.
Support and resistance
Bollinger Bands indicator on the daily chart is turning horizontally, while the price range is narrowing down. MACD is growing steadily and keeping a buy signal. Stochastic is turning down.
The indicators recommend waiting for clearer trading signals.
Support levels: 31.00, 30.25, 29.50 (near 26 January low), 28.70, 28.07, 27.00 (near 20 January low).
Resistance levels: 32.00, 32.66 (25 January high), 33.00, 34.00, 35.00 (level of the beginning of January), 35.85, 36.20.
Short positions can be opened after the breakdown of the level of 31.10 with the target at 29.55 and stop-loss at 31.40. Validity – 1-3 days.
Long positions can be opened after the breakout of the level of 32.30 (with appropriate indicators signals) with targets at 33.20 and 34.00 and stop-loss at 32.00. Validity – 2-3 days.