Current trend

During the Asian session, Brent Crude Oil prices are consolidating near 80.10. Market activity remains low at the end of the week, as most macroeconomic statistics have already been published.

The price is supported by the high probability of the US Fed switching to the “dovish” rhetoric at the September meeting, where only the volume of interest rate adjustment remains uncertain. The producer price index declined from 0.2% to 0.1% MoM and from 2.7% to 2.2% YoY, compared to preliminary estimates of 2.3%. The core indicator changed from 0.3% to 0.0% and from 3.0% to 2.4%, respectively. Based on the data, the possibility of the borrowing cost adjusting by –50 basis points has significantly decreased, and now most analysts count for a standard step of –25 basis points. Easing monetary policy will help accelerate economic growth both in the country and in the world, supporting oil and oil product demand. Meanwhile, the July US industrial production volumes fell from 0.3% to –0.6% compared to forecasts of –0.3% and the share of capacity utilization fell from 78.4% to 77.8%, contrary to preliminary estimates of 78.5%.

The report from the Energy Information Administration of the US Department of Energy (EIA) put pressure on the quotes. For the week ending August 9, oil reserves increased by 1.357M barrels after a decrease of 3.728M barrels earlier, although analysts expected a change of –2.000M barrels.

Support and resistance

On the daily chart, Bollinger bands are trying to reverse into an ascending plane. The price range is expanding from above, allowing the “bulls” to continue the positive dynamics. The MACD indicator is growing, maintaining a buy signal (the histogram is above the signal line). Stochastic is directed downwards, reflecting the likelihood of a decline 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 confident 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.