Brent fell more than 10% on Monday (down 5.5% at open) driven by a new wave of optimism after the US and Iran halted hostilities, reviving hopes that diplomacy could replace attacks and lead to a possible solution.
This action came at the right time, as the price of oil broke the critical barrier of $100 (a violation of which would have a major psychological impact on the markets and push the global economy towards a deep crisis).
Oil prices fell sharply after a false breakout above $100 and hit one-week lows ($87.54) with the next strong support breached at $90 (daily/psychological/Fibo 38.2% cloud base at $70.13/$101.97), on its way to generating a new negative signal (in a clear break down).
Meanwhile, profit-taking after a 10% decline has slowed the move, with the limited gains so far potentially indicating consolidation before a new decline (should fundamentals remain unchanged or improve further).
Sustained breakout of $90 area and 55DMA ($88.66) to expose Fibonacci support at $86.05 (50% retracement at $70.13/$101.97).
Accuracy: 90.83; 91.95; 93.27; 94.80
sip: 88.66; 87.52; 86.05; 83.80
