Brent oil finished the trading week near the resistance area of 58.15 dollars per barrel. It keeps moving within the correction and the downward channel. However, the price has formed the head and shoulder pattern, which means growth. Moving averages, on the other hand, indicate a downtrend. At the moment, we should expect an attempt to rise and test the resistance area near the level of 62, then the price will probably rebound to the support zone around 57.
An additional signal in favor of oil prices decline this week will be the test of the overbought line of the RSI index. The second signal will be considered the rebound from level 59 which is the upper line of the downward channel. Cancellation of the downward scenario will indicate the breakout of the upper line of the downward channel and further oil’s growth in the region above the level of 74.05. If the price breaches the support area with the trades closing below 55, we will consider it as the confirmation of the decline in oil prices.
As for the Brexit deal, we may have to wait until the last moment, which is the EU Summit on October 17. The lack of progress may place some additional pressure on the pound this upcoming week. In other words, the chances of a decline are higher than the possibility of growth.
The EUR/USD pair closed the week with gains around the 1.0960 level, having tested its multi-year low of 1.0878. German data and political instability in Europe were the main drivers for the dollar’s growth last week. These last few days, the macroeconomic data has been disappointing both from the US and Europe – the latest ISM Manufacturing and Non-Manufacturing indices came in negative. The dollar slightly weakened, but the EUR/USD pair has been trading around the 1.1000 figure and we can’t see any real reasons for the Euro to grow.
The upcoming week will revolve around central banks. Both, the US Federal Reserve and the European Central Bank will release the Minutes of their latest meetings. Fed’s Chief Powell, in the meantime, is scheduled to participate in different events and give speeches ahead of the Minutes. The market needs to know if the latest dismal economic growth figures will bend his hand or not.
To sum up, here are our targets for:
EURUSD – sell up to 1.0870.
Brent OIL – set a sell limit from 62,5
GBPUSD – sell up to 1,21
Don’t forget to subscribe to our YouTube channel AMarkets Global and follow the main news from the financial markets!