Current trend

This week, Brent Crude Oil prices have strengthened by almost 4.0%, partially compensating for the positions lost earlier amid growing geopolitical tensions in the Middle East.

Yesterday, Israeli aircraft attacked Beirut and Damascus while about 135 missiles were fired from Lebanon at Israel. The conflict continues, supporting oil quotes, as investors fear damage to fuel infrastructure and oil shortage from the region.

The data published yesterday by the American Petroleum Institute (API) on oil reserves for the past week reflected an increase in the indicator from –2.191M barrels to 5.474M barrels, exceeding the forecasts of 0.800M barrels, which did not put pressure on oil quotes.

The trading instrument is correcting in a long-term downward trend: its border is at 81.50. After a breakout, the priority will reverse upwards. Now, the quotes are trying to consolidate above the resistance level of 76.00, after which the trend border of 81.50 may be reached. Otherwise, a decline to 73.00 and the September low of 70.00 is likely.

Last week, the medium-term trend changed to downward. The price overcame the target zone of 76.05–75.49 and headed towards zone 2 (70.52–69.96). Now, a correction is developing to the trend border of 77.80–77.34, where short positions with the targets of 75.25 and 72.70 are relevant. However, after a breakout, the medium-term priority will reverse upwards, with the targets of 82.44–81.98.

Support and resistance

Resistance levels: 76.00, 81.50, 86.00.

Support levels: 73.00, 70.00, 66.50.

Trading tips

Long positions may be opened above 76.60, with the target at 81.50 and stop loss 75.00. Implementation period: 9–12 days.

Short positions may be opened below 73.00, with the target at 70.00 and stop loss 74.45.