Current trend

During the Asian session, Brent Crude Oil prices are showing ambiguous dynamics, holding near the psychological mark of 80.00. In the last three trading days, the asset has been rising, retreating from the lows of August 5 near the 75.00 mark. The quotes are supported by the rhetoric of the US Fed Chairman Jerome Powell about his readiness to launch a program of interest rate reductions during the September meeting, made at the end of last week as part of the annual Economic Symposium in Jackson Hole. Markets are still discussing the size of the proposed adjustment (25 or 50 basis points), trying to assess the likelihood of additional changes in the indicator before the end of the year.

At the end of this week, the US will publish inflation statistics, which will influence the monetary decisions of the regulator’s officials. Forecasts for the July core price index of personal consumption expenditures suggest a slight increase from 2.6% to 2.7% YoY and maintenance at 0.2% MoM. According to calculations, the wider indicator will remain at 2.5% and accelerate from 0.1% to 0.2%, respectively.

Another significant factor supporting oil prices was the news of the suspension of production and export of black gold in Libya against escalating political disagreements within the country, which could significantly change the volume of raw materials supply on the international market. According to Bloomberg, in July, the country produced about 1.15M barrels per day. Since then, Libya’s largest Sharara field, producing almost 270.0K barrels per day, has been stopped. The Sirte Basin is in the east of the country, where most of the country’s fossil fuel reserves and four oil export terminals are located. In addition, the situation in the Middle East remains tense, where mutual shelling between Israel and the Lebanese paramilitary organization Hezbollah has resumed.

Support and resistance

On the daily chart, Bollinger bands are growing moderately. The price range expands from above, letting the “bulls” renew the highs. The MACD indicator is rising, maintaining a strong buy signal (the histogram is above the signal line). Stochastic maintains an upward direction, located near the highs, reflecting that the instrument may become overbought in the ultra-short term.

Resistance levels: 81.00, 82.00, 82.40, 83.14.

Support levels: 80.00, 79.00, 77.86, 77.00.

Trading tips

Short positions may be opened after a breakout of the 80.00 level downwards, with the target at 77.86. Stop loss — 81.00. Implementation period: 2–3 days.

Long positions may be opened after a rebound from the 80.00 level and a breakout of the 81.00 level, with the target at 83.14. Stop loss — 80.00.