Current trend

Brent Crude Oil the quotes are falling within a medium-term downward trend, holding around 77.73.

The price is under pressure due to fears of a downturn in the global economy, primarily due to a slowdown in Chinese and American indicators, which could ultimately lead to a significant reduction in demand for petroleum products. Thus, July manufacturing PMI of China adjusted from 51.8 points to 49.8 points, and the Q2 gross domestic product (GDP) – from 5.3% to 4.7%. July data on the US labor market showed a cooling: unemployment reached 4.3%, and employment growth slowed to 114.0K, which, along with the likelihood of expanded production by OPEC , could lead to an excess of raw materials on the market and further increase pressure on Brent Crude Oil the quotes.

For a long time, the negative dynamics were restrained by the instability factor in the Middle East. Experts expected a direct clash between Israel and Iran after the death of the leader of the political bureau of the Palestinian movement Hamas, Ismail Haniyeh. However, more than a week has passed since then, and there has been no reaction. In addition, moderate support for oil prices may be provided by a decrease in the reserves of black gold in the United States, which, according to the Energy Information Administration of the US Department of Energy (EIA), continues for the sixth week in a row, last amounting to 3.728M barrels.

Thus, negative factors still dominate the market.

Support and resistance

This week, the trading instrument dropped to 75.00 (Murrey level [0/8]), failed to break it and corrected upwards. To change the trend and resume growth, the quotes need to consolidate above 81.25 (Murrey level [4/8], the middle line of Bollinger Bands), after which it may reach the area of ​​84.38 (Murrey level [6/8]), 87.50 (Murrey level [8/8]). If the 75.00 mark is overcome, the quotes will decrease to the target of 71.88 (Murrey level [–2/8]).

Technical indicators signal in favor of the development of a downward trend: Bollinger Bands are directed downwards, and the MACD histogram is increasing in the negative zone, and Stochastic has turned upwards, not excluding a limited correction.

Resistance levels: 81.25, 84.38, 87.50

Support levels: 75.00, 71.88.

Trading tips

Short positions may be opened below 75.00, with the target at 71.88 and stop loss 77.50. Implementation period: 5–7 days.

Long positions may be opened above 81.25, with the targets of 84.38, 87.50 and stop loss 79.00.