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WTI Oil outlook: Daily cloud base came under increased pressure

Slobodan Drvenica Windsor Brokers

Brent oil price jumped on Monday morning following an escalation in the Middle East (Israel attacked Iran’s energy infrastructure and Iran responded by a wave of attacks on Israel) but gains were short-lived, as the price fell on Iran’s announcement of an end to attacks that calmed the markets.

In addition, OPEC+ approved a fourth increase in oil output to stabilize oil markets that added pressure on prices.

Brent price was down 4.5% on Thursday and Friday with strong fall being contained by daily Ichimoku cloud base ($93.14) which continues to provide solid support (probe below cloud base on May28 / June1 period resulted in a false break).

Daily studies remain predominantly bearish and contribute (in addition to weakening fundamentals) to scenario of renewed attack at cloud base, firm break of which to generate fresh bearish signal and open way towards $90 zone (psychological / May 29 low / 100DMA).

Near-term bias is expected to remain with bears while the price stays below significant barrier at $98.63 (Fibo 38.2% of $112.70/$89.93) which has so far capped two attempts and guards another important resistance at $100 (psychological).

Caution on potential repeated failure at cloud base that may keep near term action in extended sideways mode.

Res: 97.41; 98.63; 99.70; 100.00

Sup: 93.14; 91.76; 90.81; 89.93

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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WTI Oil outlook: Daily cloud base came under increased pressure

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