Global macro overview for 07/04/2017:
After the US launched cruise missile attacks on the Syrian airbase overnight (reportedly responsible for the chemical attacks this week), the geopolitical tensions in the Middle East have intensified. The biggest beneficent of the attack is now Crude Oil, which had spiked almost 2.0% after the news of attack was released. Moreover, the uncertain situation in the Middle East also adds to potential supply disruptions to Crude Oil, so a further upwards move is expected. The uncertainty is based on the question whether it was a one-off attack, are other nations going to join in and what will be the response of China, Iran, and Russia, the biggest Crude Oil producers in the world. Not much can be concluded at the moment, so the market participants must wait for the official statement from the involved countries to hit the newswires. Crude Oil still remains at the elevated price levels.
Let's now take a look at the Crude Oil technical picture at the H4 time frame The whole resistance area marked as the orange rectangle was violated after the news was released and now it will act as a support zone. The next technical resistance is seen at the level of 53.25 (78%Fibo) and then at 53.78. Please notice, the market conditions are overbought and there is a growing bearish divergence between the price and momentum oscillator, so immediate knee-jerk price action cannot be excluded as well.
