WTI Oil outlook: Oil prices fall 10% as US and Iran pause attacks

Slobodan Drvenica Windsor Brokers

Brent price fell over 10% on Monday (down 5.5% on opening) driven by fresh wave of optimism after US and Iran paused hostilities, reviving hopes that diplomacy may replace attacks and lead towards possible solution.

The action came at the right time, as oil price cracked critical barrier at $100 (violation of which would have significant psychological impact on the markets and push global economy further towards deep crisis).

Oil prices fell sharply after a false break above $100 and hit the lowest levels in one week ($87.54) with violation of next strong support at $90 zone (daily cloud base / psychological / Fibo 38.2% of $70.13/$101.97), on track to generate fresh negative signal (on clear break lower).

Meanwhile, profit-taking after 10% drop slowed the action, with so far limited upticks likely to signal consolidation ahead of fresh push lower (in case fundamentals remain unchanged or improve further).

Sustained break of $90 zone and 55DMA ($88.66) to expose Fibo support at $86.05 (50% retracement of $70.13/$101.97).

Res: 90.83; 91.95; 93.27; 94.80

Sup: 88.66; 87.52; 86.05; 83.80

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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