Oil has gained ground amid geopolitical tensions as Russia halted gas supplies to Poland and Bulgaria until payments in Rouble are made, while hopes of Chinese economic stimulus buoyed the demand outlook. We are currently facing an event driven market combined with a risk-off sentiment. However, the technical situation seems to suggest that further gains may be challenging given the technical barriers to overcome
Ichimoku analysis :
Taking a look at the chart using ichimoku, one can notice that the bulls managed to break through the psychological barrier at $100 and enter the ichimoku cloud in the H4 interval (yellow cloud). However, the gains were halted by the daily cloud (gray cloud), overlaid on the H4 chart. The daily cloud is a strong resistance that will need to be breached in order to consider further upside.
In this context, a decline is the basic scenario, which will be confirmed if prices break out from the bottom of the H4 cloud. In this case, prices could tackle the uptrend line near $96 a barrel. If this support breaks, the next main support can be found at $93.20 per barrel, which corresponds to the local low of April 11
On the other hand, only a breakout of the daily cloud, and the bearish line linking the local highs would allow for further rises towards the April 18 highs at $109 a barrel.
OIL.WTI, H4 interval, Source : xStation5