Current trend

Brent Crude Oil quotes have been actively adding value since the end of last year and are currently at 85.94 (Murrey level [7/8]): a long-term uptrend is forming amid expectations of lower interest rates by leading regulators and continued tensions in the Gaza Strip.

Comments from representatives of the US Federal Reserve, the European Central Bank (ECB), and the Bank of England are increasingly convincing investors that they will start lowering interest rates between May and July. On the one hand, this will put pressure on national currencies, primarily the US dollar, and strengthen the position of commodity assets, and on the other hand, easing monetary policy stimulates economic growth, and, consequently, an increase in demand for petroleum products. At the same time, negotiations between representatives of Israel and the Hamas movement, which are being conducted in Qatar with the mediation of the United States, have not yet yielded results, which means that there are risks of increased tension in the region and disruptions in oil supplies. Thus, the long-term fundamental background contributes to strengthening the upward dynamics of quotes.

Also today, investors are waiting for the publication of weekly inventory data from the American Petroleum Institute (API): they have been significantly declining for two weeks in a row, most recently by 1.519 million barrels. The continuation of this trend may provide additional short-term support for the trading instrument.

Support and resistance

Technical indicators confirm the continuation of the uptrend: Bollinger Bands and Stochastic are reversing up, and MACD has stabilized in the positive zone. This position will allow the quotes to continue growing towards the targets of 87.50 (Murrey level [8/8]) and 89.70 (38.2% Fibonacci retracement). The key for the "bears" is the central line of Bollinger Bands in the area of 83.40, consolidation below which may cause a decrease to the target of 81.25 (Murrey level [4/8], the lower border of the ascending channel), but so far this scenario seems less likely.

Resistance levels: 85.94, 87.50, 89.70.

Support levels: 83.40, 81.25, 79.69.

Trading tips

Long positions can be opened from the level of 86.40 with targets of 87.50, 89.70 and stop-loss of 85.90. Implementation period: 5–7 days.

Short positions should be opened below the 83.40 mark with the target of 81.25 and stop-loss around 85.30.