Brent oil edges higher in early Thursday’s trading after suffering heavy losses in past three days (only on Wednesday Brent lost over 9% of its value).
Partial profit taking lifted the price from new multi-week low ($93.40) after a sharp fall was contained by significant technical supports provided by 50% retracement of $70.13/$117.43 rally / converged and ascending 100/200DMAs / daily cloud base).
The latest drop was sparked by renewed optimism that peace talks may lead towards further easing of tensions or even the end of US/Iran war, although traders are still cautious as geopolitical situation remains fragile amid existing threats of fresh escalation.
Technical picture has weakened significantly following break of strong supports at $100 zone (psychological / trendline support / daily cloud top) accompanied with strengthening of negative momentum and formation of 10/20DMA bear-cross).
Oversold stochastic, on the other hand, contributes to signals of correction, which should be limited (if current optimistic view persists) and offer better levels to join bearish market.
Broken $100 zone reverted to significant resistance which should ideally cap upticks (also marking the fourth, corrective wave, of five-wave cycle from $117.40 peak.
Res: 96.92; 100.00; 100.61; 102.03
Sup: 93.62; 92.78; 90.00; 88.19
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