Brent oil price rose over $3 on Wednesday on a partial profit taking after three-day fall (about 10% loss).
The bounce was signaled by long-tailed Tuesday’s daily candle and a bear-trap under psychological $90 support, where larger bears faced increased headwinds.
Recovery attempts were also boosted by fresh wave of pessimism after Iran’s officials said that they would not allow any enriched nuclear material to leave the country that partially offset recent comments from President Trump, playing down the need for further military action against Iran.
Fresh recovery cracked the lower boundary of strong resistance zone between $93.30 and $94.30, consisting of 200DMA / daily cloud base / broken 50% retracement of $70.13/$117.40 / 100DMA.
Firm break here is needed to generate initial bullish signal (formation of reversal pattern on daily chart), with extension above $95.82 (Fibo 23.6% of $117.40/$89.16) to firm near-term structure and open way towards key $100/$101 resistance zone (Fibo 38.2% / psychological / falling 10DMA / daily cloud top), break of which to complete reversal signal and open way for stronger recovery.
On the other hand, daily studies are still weak and failure to regain levels above $100 breakpoint may signal a healthy correction before larger bears regain control.
Geopolitical factor, as dominant market driver, will be closely watched for fresh direction signals.
Res: 95.82; 98.42; 100.00; 101.00
Sup: 93.30; 91.43; 90.00; 89.16
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