Brent: Strong Support Level of 44.00. Technical Analysis of 04.05.2016.
Review and dynamics
Despite sharp decline, which started since the beginning of the month, the price of crude oil Brent remains in the upward channel with the upper limit above the level of 48.40 USD. After reaching new 5-month highs above the level of 48.00 USD per barrels the price fell below support level of 46.20 (Fibonacci 50% to the decline since June 2015 and the level of 65.30 to the lows of 2016 at the level of 27.05), and ЕМА50 on the weekly chart.
On 4-hour and daily charts the indicators OsMA and Stochastic give sell signals.
In case of the downward movement and break out of the level of 44.00 (ЕМА200 on the daily chart), the price may fall to 41.70 (Fibonacci 38.2%, lower limit of the ascending channel and ЕМА144 on the daily chart).
This is a strong support level and since the end of January the price is moving in the narrow channel on the daily chart. It is possible that the price will pullback from this level and then, will continue to rise to 48.40 and 50.70 (Fibonacci 61.8% and highs of November 2015).
As an alternative scenario the price can consolidate below the level of В 41.70, which will trigger further decline to 36.05 (Fibonacci 23.6%), 30.00 and further to the lows of this year at the level of 27.00 USD per barrel.
Support levels: 44.00, 43.80, 41.70, 41.00, 40.00 and 36.05.
Resistance levels: 46.20, 48.00, 48.40, 49.00, 50.00 and 50.70.
Sell Stop: 44.50. Stop-Loss: 45.20. Take-Profit: 44.00, 43.80, 42.15, 41.70, 41.00, 40.00 and 36.05.
Buy Stop: 45.50. Stop-Loss: 44.80. Take-Profit: 46.20, 48.00, 48.40, 49.00, 50.00 and 50.70.
The price tries to reach support level of 44.00
Indicators give sell signals