Brent price eases from key $110 resistance zone as Trump lifts sanctions on Russia

Brent oil price eased from five month high in early Monday as decision of President Trump to lift sanctions and tariffs on Russia provided temporary relief.

Oil price advanced over 4% on Friday and hit $110 zone which marks strong barrier (several attempts failed here in mid-September, as well as psychological) and break here to further sour the sentiment, which Trump tries to avoid with his latest action.

Pullback was so far not very significant as it stalled on approach to first Fibo support at 106.47 (23.6% of $95.11/$109.98 upleg) before bouncing, with markets still assessing the impact.

Trump’s decision was from one side good, as it aims to stabilize energy markets and counter further shocks, as the main generators of crisis (war in the Middle East / heavy sanctions on Russia and Iran which are among top oil suppliers, in the situation when oil / gas supplies from the Middle East have brought to the minimum) haven’t been tackled, but also faces heavy criticism of using energy crisis to gain political points ahead of mid-term election.

Bullish technical picture remains intact on daily chart, as pullback was so far shallow, although overbought stochastic and south-turning RSI suggest that bulls may slow or take a breather.

Near-term action may be held within a consolidation in case of shallow dips or may enter correction if pullback violates supports at $106.47 (Fibo 23.6%) and $105.33 (rising 10DMA), with signs of a healthy correction expected while dips hold above $104.30 (Fibo 38.2%).

Caution on potential break of $104.30 and a higher low at $103.40 (Oct 15) which may sideline bulls and unmask key supports at $101.26 (bull trendline) and $100 (psychological)

Res: 109.40; 110.00; 110.50; 111.48
Sup: 107.27; 106.47; 105.33; 104.30