BRENT OIL – bulls hold grip but consolidation may precede fresh push higher

Brent oil regained traction on Tuesday and probed again above round-figure 108 level.

Fresh strength partially offsets signals of developing offers from long upper shadow on Monday’s candle (although Doji) and pushed price to the upper side of congestion of past three sessions to re-focus psychological 110 barrier.

Fundamentals remain supportive following the latest escalation on the Saudi/Yemen border zone and damage on key pipeline in Saudi Arabia, as well as control of Bab el-Mandeb strait that adds to supply worries as traffic through Hormuz strait remains at minimum.

Oil price hit levels ticks away from $110 on Monday, facing increased headwinds in this zone, due to overbought conditions and significance of the resistance, but limited dips (so far contained by rising 5DMA) suggest that upside pressure persists.

On the other hand, Monday’s Doji signals indecision and suggests that traders refrain from bigger action now and await fresh signals.

First support lays at $104.80 (Monday’s low), followed by Friday’s bottom at $103.48) and former top at 101.97 (July 23) where potential deeper dips should find firm ground and keep intact pivotal $100 support.

Res: 108.40; 110.00; 111.09; 112.70
Sup: 104.80; 103.48; 101.97; 101.16