Technical Analysis #C-BRENT : 2020-01-31

Indicator Signal

  • RSI Neutral

  • MACD Sell

  • Donchian Channel Neutral

  • MA(200) Sell

  • Fractals Sell

  • Parabolic SAR Sell

  • Fibonacci Sell

Chart Analysis

On the daily timeframe #C- BRENT: D1 has breached below the 200-day moving average MA(200), which is declining. It failed to breach Fibonacci 61.8 resistance level.

We believe the bearish momentum will continue after the price breaches below the lower boundary of Donchian channel at 56.73. A level below this can be used as an entry point for placing a pending order to sell. The stop loss can be placed above 59.84. After placing the order, the stop loss is to be moved every day to the next fractal high, following Parabolic signals. Thus, we are changing the expected profit/loss ratio to the breakeven point. If the price meets the stop loss level (56.73) without reaching the order (59.84), we recommend cancelling the order: the market has undergone internal changes which were not taken into account.

Fundamental Analysis

US domestic crude oil stock rose last week. Will the BRENT decline?

On Wednesday the Energy Information Administration reported that US crude supplies rose by 3.5 million barrels. SP Global Platts analysts had forecast a smaller rise of 1.4 million barrels, while the American Petroleum Institute trade group’s Tuesday report estimated a decline of 4.3 million barrels. Rising US crude oil inventories are bearish for Brent. At the same time there have been reports OPEC considers extending output cuts until June, and even a deeper cut from current levels. A rise in geopolitical tensions in Middle East is also an upside risk for oil.