Brent Oil outlook: Brent price falls after recovery failed to clear important $90 barrier

Slobodan Drvenica Windsor Brokers

Brent Oil

Brent oil price rose to the highest in over one week on Tuesday, in extension of Monday’s nearly 5% advance, following the latest verbal escalation by President Trump that quickly changed the sentiment and countered efforts of Iran and Oman to find solution for reopening of strategic Hormuz strait.

The latest demands from President Trump provoked reaction of Iran to stop negotiations with current US administration until the end of Trump’s mandate in 2029.

However, markets have already learned how to filter the waves of usually contradictory news that come on daily basis and how to get the best results in using so-called Trump indicator.

Daily chart still shows mixed signals as moving averages turned to almost full bullish configuration, but 14-d momentum remains in negative territory that partially offset positive signal that was reflected on today’s price action, when the price cracked psychological $90 barrier (also 50% retracement of $101.97/$78.10) but subsequent quick reversal warns that recovery might be running out of steam.

Fresh weakness (price was down over $3 during mid-European/early US session on Tuesday) cracked significant support at $87.22 (broken Fibo 38.2%/20DMA) with firm break here to open way for deeper pullback and keep the downside vulnerable of possible full reversal of recovery leg (in case of shift in Trump’s rhetoric).

On the other hand, limited pullback (ideally to hold above $87.22) or to find footstep above $85.00 zone (just above 10/55DMA bull-cross) would keep in play hopes of renewed attack at $90 pivots and unmask targets at $92.85/$93.28 (daily cloud top/Fibo 61.8%/100DMA).

Res: 88.57; 90.00; 92.85; 93.28.
Sup: 86.50; 85.00; 84.65; 83.73.

Author

Slobodan Drvenica

Windsor Brokers

Industry veteran with over 22 years’ experience, Slobodan Drvenica joined Windsor Brokers in 1995 when he was an active trader for more than 10 years, managing the trading desk and own account departments.

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