WTI oil price pulls back from new 7-year high on Tuesday, as geopolitical tensions ease on news that Russia returns some military units to their bases after exercises near Ukrainian border.
Optimistic news prompt traders to collect some profits from strong bullish acceleration in past two days after the situation became overheated on signals from the western media that Russia could attack Ukraine these days.
The oil price eased over 3% since opening on Tuesday, with possibility for a deeper drop if the situation in Ukraine cools down further that would ease concerns over strong supply disruption, expected on escalation of conflict.
Revived nuclear talks between Iran and the United States also boost optimism. If two countries reach an agreement that would allow for higher Iranian oil exports and increase pressure on oil prices.
The geopoliticals are expected to remain key driver of oil prices, with easing in tensions to push the price significantly lower.
Technical studies on daily chart started to weaken and develop an initial negative signal, with today’s strong bearish close to complete reversal pattern and weaken near-term structure.
South-heading 14- momentum indicator and RSI reversal from overbought territory, add to negative signals, which wood look for confirmation on break below psychological $90 support.
Fresh bears pressure rising 10DMA ($91.14), which guards $90 support and other pivotal levels at $88.64 and $87.91 (ascending 20DMA/Fibo 23.6% of $62.42/$95.79 rally). Break of these supports would signal deeper pullback and expose key Fibo support at $83.04 (Fibo 38.2% of $62.42/$95.79 rally).
Res: 91.96; 93.14; 95.14; 95.79.
Sup: 91.14; 90.00; 88.64; 87.91.
