. Brent Crude Oil Price Update and Analysis - Capital Street FX

Brent Crude Oil Price Update and Analysis

Brent Crude Oil Price Update and Analysis

01 May 2024

Oil prices decline for the third consecutive day on optimism regarding a ceasefire in the Middle East.

FUNDAMENTAL OVERVIEW:

On Wednesday, oil prices dropped over 1%, extending a three-day decline. This was influenced by expectations of a ceasefire agreement in the Middle East and increased crude inventories and production in the United States, the top consumer of oil.

Expectations for a ceasefire between Israel and Hamas have heightened, driven by renewed diplomatic efforts led by Egypt. However, Israeli Prime Minister Benjamin Netanyahu remains committed to carrying out a promised attack on Rafah.

Federal Reserve officials are wrapping up their current two-day policy meeting on Wednesday, with expectations leaning towards the maintenance of steady interest rates. A rate reduction would stimulate economic growth and enhance demand.

Persistent indications of inflation have also prompted worries regarding the demand for crude oil, especially as the U.S. driving season approaches, characterized by a substantial surge in gasoline demand.

Traders are boosting their wagers on the possibility that the Federal Reserve (Fed) could postpone an interest rate cut and prolong the retention of the current benchmark rate due to the robust U.S. economy and persistent inflation. This could result in a strengthened US Dollar (USD) and apply downward pressure on USD-denominated oil.

BRENT CRUDE OIL TECHNICAL ANALYSIS DAILY CHART:

Technical Overview:

Brent Crude Oil is currently trading within a down channel.

Brent Crude Oil is positioned below all Moving Averages (SMA).

The Relative Strength Index (RSI) is in the Selling zone, while the Stochastic oscillator suggests a Negative trend.

Immediate Resistance level: 85.96

Immediate support level: 84.85

HOW TO TRADE BRENT CRUDE OIL

After initially trading at higher prices, Brent Crude Oil encountered resistance and stalled its upward movement, forming a double top pattern. Subsequently, the price declined and began moving downwards. Presently, it has breached the previous day’s low and is nearing a significant support zone. Further downside is anticipated if this zone is breached.

TRADE SUGGESTION- STOP SELL – 84.52, TAKE PROFIT AT- 81.74, SL AT- 86.84.