Current trend

Last week, Brent Crude Oil quotes resumed growth within the long-term uptrend and are currently trying to consolidate above 87.50 (Murrey level [4/8]). The uptrend in prices was facilitated by the publication of a number of positive economic data, as well as the persistence of geopolitical tensions in the Middle East.

According to preliminary April data, the Composite PMI in the eurozone increased to 51.4 points, which allows experts to expect continued economic growth in the Eurozone, as well as the exit of the German economy from recession. At the same time, the growth of gross domestic product (GDP) in the United States for the first quarter turned out to be below the forecasts and amounted to 1.6%, and the report of the American Petroleum Institute (API) recorded a decrease in reserves by 6.368 million barrels. Thus, signs of renewed global economic growth increase the likelihood of growing demand for petroleum products, pushing prices up. Nevertheless, in the near future, quotes may again come under pressure if the next truce talks between Israel and the Hamas movement, held in Cairo with the mediation of the United States, prove successful. The conclusion of a peace agreement will significantly ease tensions in the region and reduce the risks of oil transportation. Also, the reversal of the current trend will be facilitated by the postponement of the US Federal Reserve's monetary policy easing to the end of the year. The regulator's officials may hint at such a scenario during the next meeting on Friday.

However, if a truce in the Middle East cannot be achieved, and the US Federal Reserve maintains its "dovish" rhetoric, then oil prices will be able to resume serious growth.

Support and resistance

Technical indicators confirm the continuation of the uptrend: Bollinger Bands and Stochastic are reversing up, MACD has stabilized in the positive zone. If the central line of Bollinger Bands (88.55) is broken out, price growth may continue to the levels of 90.62 (Murrey level [5/8]) and 93.75 (Murrey level [6/8]). The key for the "bears" is the 85.70 mark (the lower line of Bollinger Bands), with a breakdown of which the decline can resume to 81.25 (Murrey level [2/8]), but this scenario seems less likely.

Resistance levels: 88.55, 90.62, 93.75.

Support levels: 85.70, 81.25.

Trading tips

Long positions can be opened above 88.55 with targets at 90.62, 93.75 and stop-loss at 87.00. Implementation period: 5–7 days.

Short positions should be opened below the 85.70 mark with the target of 81.25 and stop-loss around 87.50.