WTI oil cracked $71 barrier on Wednesday, hitting new 3 ½ year highs, on strong bullish acceleration following decision of the US to pull out from international nuclear deal with Iran.
Market reaction on such scenario was expected as new sanctions on Iran, the major oil producer in the Middle East, could increase uncertainty over global oil supplies and raise tensions in the region.
The decision would also lead to further tightening in the global oil market which would result in rising oil price.
Bullish techs reinforce positive sentiment for further gains as fresh bullish acceleration approaches initial target at $71.61 (Fibo 161.8% projection of the upleg from $66.84 trough).
Break higher would expose $72.24 (Fibo 200% projection), with bulls capable of travelling to next key barrier at $76.35 (Fibo 61.8% of 107.45/$26.04 Jun 2014 / Jan 2016 fall).
Rallies could be interrupted by corrective dips on overbought conditions which are expected to provide better buying opportunities.
Rising 10SMA (currently at $68.92) is expected to contain extended dips and keep bullish structure intact.
Res: 71.21, 71.61, 72.24, 73.00
Sup: 70.81, 70.00, 69.84, 68.92
