Brent Oil outlook: Recovery faces headwinds but holds grip for now

Slobodan Drvenica Windsor Brokers

Brent Oil

Brent price rose for the second straight day on Thursday as fresh escalation of US/Iran conflict faded recent optimism of potential diplomatic initiative and revived fears about potential supply disruption.

Oil price peaked at $93.33 during European session on Thursday, marking over 50% retracement of $101.97/$92.51 bear-leg, but recovery faced increased headwinds on approach to the top of daily Ichimoku cloud ($93.66) and so far, reversed the big part of today’s recovery.

With geopolitical picture (as dominant factor in creating near-term direction) being very fragile and with high risk of further escalation, technical studies on daily chart are neutral to bullishly aligned and partially contribute to recovery attempts.

Repeated daily close above $90 (psychological/broken Fibo 38.2% of $101.97/$82.51) will be required to keep near-term action biased higher, with extension and close above 50% retracement ($92.24) to validate positive signal and strengthen near-term structure for attack at $93.66 (daily cloud top) and $94.54/76 (Fibo 61.8%/100DMA).

Caution on failure to told gains above $90 that would expose the lower pivot at $86.85 (daily cloud base).

Res: 92.24; 93.33; 93.66; 94.54.
Sup: 89.04; 87.63; 86.85; 85.29.

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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