Brent crude is stuck below the $80 barrier for a second straight session, still weighed down by Tuesday's sharp sell-off. The daily chart points to further downside, even as traders stay wary of geopolitical swings from US-Iran talks and Red Sea tanker attacks.
Brent crude is holding in a narrow range for a second straight session, unable to shake off Tuesday's massive loss of more than 6% in a single day. The price remains pinned under the $80 psychological level, extending the sideways consolidation that has held since the sell-off.
The 200-day moving average, at $80.73, and the base of the daily Ichimoku cloud are capping every attempted uptick. A bear cross forming between the daily Tenkan-sen and Kijun-sen lines adds to strengthening negative momentum, and as a result the broader technical picture stays bearish.
Yet the chart is not the only force at work. Markets still take their direction mainly from geopolitics rather than technical patterns, currently the dominant factor steering price.
Fresh bears have paused, however, despite optimistic news about the latest US-Iran peace talks, because traders stay cautious following the failure of previous agreements. Persisting tensions after attacks on Saudi tankers in the Red Sea reinforce that caution.
Near-term action should stay bearishly aligned while Brent holds below the 200DMA and cloud base, therefore pressuring immediate support at $77.64, the 76.4% Fibonacci retracement of the $70.13-$101.97 range. A sustained break lower would then expose $75.28, July's 10th trough, and $74.25, the lower 20-day Bollinger band, just above the key $70 support zone.
Alternatively, a break above the daily cloud would ease the immediate downside risk. That scenario would open the way to $83.73, the 23.6% Fibonacci retracement of the $101.97-$78.10 decline. It would then expose $86.05, the daily Kijun-sen level, $86.32, Tuesday's spike high, and $87.22, the 38.2% Fibonacci pivot.
Source: ActionForex
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