Brent: oil still has a potential to grow
Current trend
During the holiday week crude oil Brent has traded in the range of 112.03-111.23. Today investors are waiting for the weekly report on changes in commercial stocks of oil and oil products from the US Department of Energy. According predictions, this index will fall by 1.9 million barrels. Note that decline in oil reserves has been observed for three consecutive weeks since in December and January energy consumption traditionally increases. Nevertheless, if forecast is justified, oil prices will increase.
Support and resistance
Today downward correction may reach the lower limit of the range 111.23. In case of support from American news the price can grow to the levels of 111.70 and 112.03 or even up to 112.60. On the four-hour chart technical indicators confirm possibility of downward movement. Bollinger bands are converging and directed horizontal; the price chart has broken down the moving average. MACD histogram is in the positive zone, its volumes are decreasing. Stochastic lines are crossing and directed downwards.
Trading tips
In the current situation it is advisable to place short positions from the current price level with profit taking at 111.23. Long positions with the target of 112.03 can be opened from the same level.
Dmitry Zolotov
Analyst of LiteForex Group of Companies
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EUR/USD: general review
Current trend
Before Christmas holidays the pair traded in the range of 1.3663-1.3700; however today at the opening of European session the price managed to break down the upper limit of the channel. It seems that the pair faced resistance at the level of 1.3745, while support is expected at the level of 1.3700. Important economic releases are not scheduled for today; therefore strong movement in price is not expected.
In such situation it makes sense to take trading decision on the basis of technical indicators. On the four-hour chart indicators show uptrend. MACD histogram is in the positive zone, its volumes are increasing. Bollinger bands show divergence, confirming forecast of further rise in the pair; however the price has broken the Bollinger upper line, which can indicate a chance of downward correction.
Support and resistance
Resistance level is the local highs of 1.3745. Support levels are the limits of the channels: 1.3700 and 1.3663.
Trading tips
If current trend continues, it is advisable to open sell positions as part of corrective movement from resistance level of 1.3745 with the targets of 1.3700 and 1.3663.
Vadim Smarzh
Analyst of LiteForex Group of Companies
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