Current trend

During the Asian session, the price of WTI Crude Oil is consolidating near 86.50, renewing the highs of October 4: at the end of last week, quotes were actively growing against geopolitical tensions in the Middle East.

Renewed forecasts from the U.S. Department of Energy’s Energy Information Administration (EIA) and OPEC released last week suggest fuel demand will remain poor in the near term, with hydrocarbon inventories expected to continue to decline and record lows. However, the EIA report for the week of October 6 indicated an increase of 10.176M barrels after a decline of 2.224M barrels earlier compared to forecasts for an increase of 0.492M barrels.

In the United States, a monthly report on the state of the budget for August is expected to be published soon. In addition, September data on retail sales dynamics may reflect a reduction from 0.6% to 0.2%, and the value excluding cars – from 0.6% to 0.1%. Industrial production volumes, according to preliminary expert estimates, will be adjusted from 0.4% to 0.1%.

Support and resistance

On the daily chart, Bollinger Bands are steadily declining: the price range is narrowing, reflecting the emergence of ambiguous trading dynamics in the short term. The MACD indicator is growing, maintaining a buy signal (the histogram is above the signal line), and may soon test the zero line for a breakout. Stochastic is rising, approaching its highs, which indicates that the trading instrument may become overbought in the ultra-short term.

Resistance levels: 87.00, 88.52, 90.00, 91.50.

Support levels: 85.50, 84.27, 82.86, 82.00.

Trading tips

Long positions may be opened after 87.00 is broken upward with the target at 90.00. Stop loss – 85.50. Implementation time: 2–3 days.

Short positions may be opened after a rebound from 87.00 and a breakdown of 85.50 with the target at 82.86. Stop loss – 87.00.