Brent oil extends pullback from new four-year high at $86.73 and broke below initial support at $83.35 (rising 10SMA), receiving negative signal from market expectations that part of Iranian oil export would continue after the US reimposes sanctions in November.
Two big Iranian oil buyers from India already ordered oil in November, which could keep Iranian exports partially afloat.
However, the pullback is so far seen as corrective action on profit-taking from new multi-year highs.
Overall sentiment remains bullish, driven by various factors, among which are the concerns about global supply after supplies from Iran stop and markets participants already speculating about psychological $100 target.
Meanwhile, pullback could extend further, as daily indicators continue to head south.
Rising 20SMA marks next significant support at $81.20, followed by $80.45 (Fibo 38.2% of $70.29/$86.73 ascend), where correction should be ideally contained to keep larger bulls intact.
Only break below former psychological barrier at $80 (reinforced by rising 30SMA) would generate stronger negative signal for deeper correction.
Res: 83.35, 84.30, 85.11, 86.40
Sup: 82.79, 82.00, 81.20, 80.45
