Oil Prices Crash as Chart Beats News Again
The price of crude oil rose for three weeks without pause, hitting a strong resistance area at $92.50. The chart indicated the end of the rally was near, even before the latest developments in the Middle East.
On Thursday, it was noted that the breakout above the declining resistance line could be invalidated at any moment. Then on Friday, the breakout was indeed invalidated as crude oil prices fell back under $90 despite increased tensions between the US and Iran.
The Pentagon suspended bombing campaigns in the region over the weekend, and a deal began taking shape for Iranian-run vessel transit with fewer restrictions on shipping. However, this morning crude oil prices collapsed, down roughly 7% in West Texas Intermediate.
Looking at gold, it reacted to the same news differently. The inflation impulse that pushed rate hike expectations above 80% is unwinding in a single session. Rate-hike expectations are being pulled back ahead of Wednesday's Federal Reserve decision, and the dollar is easing.