General analysis Brent for 12.11.2021
Current Dynamics
Brent is declining on Friday amid strong dollar. Growing price pressure in the U.S. indicates the need for an aggressive rate hike. Market participants are waiting for the Fed to announce its specific plans on monetary policy. In addition, the OPEC lowered the demand forecast for the fourth quarter of this year by 330 thousand barrels per day. The main reason for revision of the forecast is the current high prices.
Another pressure factor on the hydrocarbons market is the USA intention to exert more influence on pricing in the market. President Biden intends to restrain the growth of prices, including energy prices. Earlier the U.S. leader together with India and Japan called on OPEC+ to increase the production level, but the largest exporters continued to stick to the plan of gradual increase of 400 thousand barrels per day. Washington is currently considering the option of releasing large amounts of strategic reserves.
Baker Hughes will release a report on the number of active drilling rigs tomorrow at 8 p.m. (GMT+2). Also at 17:00 (GMT +2), it is important to pay attention to the release of statistics on the U.S. labor market, as oil is now very sensitive to the dynamics of the dollar.
Support and resistance levels
On the 4-hour chart the instrument is declining in the lower range of the Bollinger bands. The indicator turns down and the price range has widened, indicating a continuation of the downtrend. MACD histogram is in the negative zone, maintaining a strong sell signal. Stochastic entered the oversold area, no signal is formed.
- Support levels: 78.95, 79.80, 80.35.
- Resistance levels: 81.80, 82.70, 83.70, 84.90, 85.65.
Trading scenarios
- It is recommended to open long positions above the level of 81.80 with a target of 84.30 and a stop-loss at the level of 80.90. Implementation period: 1-3 days.
- Short positions should be opened below the level of 80.40 with a target of 79.30 and a stop-loss at 81.10. Implementation period: 1-3 days