Brent crude rose for a second straight session on Thursday after renewed US-Iran friction overtook hopes for a diplomatic opening, reviving fears of a supply disruption. The advance stalled near the top of the daily Ichimoku cloud, and the market gave back much of the day's gains.
Brent rose for a second straight day on Thursday as fresh escalation in the US-Iran conflict pushed aside recent optimism over a possible diplomatic initiative. That shift revived fears of a potential supply disruption.
The price peaked at $93.33 during the European session on Thursday, marking over 50% retracement of the $101.97/$92.51 bear-leg. The recovery then hit increased headwinds near the top of the daily Ichimoku cloud at $93.66 and reversed a large part of the day's gains.
Even so, the geopolitical picture remains the dominant factor for near-term direction and stays very fragile, with a high risk of further escalation. Daily technical studies are neutral to bullishly aligned and partially support the recovery attempts.
A repeated daily close above $90 — the psychological level and the broken 38.2% Fibonacci retracement of $101.97/$82.51 — would be needed to keep near-term action biased higher. An extension and close above the 50% retracement at $92.24 would validate that positive signal and strengthen the case for a push toward $93.66, the daily cloud top, and then $94.54/76, the 61.8% level and the 100-day moving average.
Caution applies on a failure to hold gains above $90, which would expose the lower pivot at $86.85, the daily cloud base. Resistance stands at 92.24, 93.33, 93.66 and 94.54, while support sits at 89.04, 87.63, 86.85 and 85.29.
Source: ActionForex
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