Oil prices turn lower as Bessent says U.S. may have Iran deal "today or tomorrow"
London Gas Oil dropped to $1,158.24 on the 4-hour chart, slicing nearly 13% off recent highs and crashing through major support at $1,146. This puts bears in the driver’s seat—unless an oversold relief bounce materializes fast.
Bears Take Control
Breakdown Confirmed:
London Gas Oil has unraveled since peaking at $1,328, posting an aggressive reversal. The most recent 4-hour candle closed at $1,158.24, deep below both the key SMA(20) at $1,262 and the 38.2% Fibonacci retracement at $1,146. The uptrend is technically intact above the long-term SMA(200) at $1,051.50, but price is now just 10% above this pivotal zone.
- RSI: 33.89 (nearing oversold—bounce risk rises)
- MACD: Deepening negative gap, signaling strong momentum down
- SuperTrend: Firmly bearish, resistance overhead at $1,264
- Volume: Fierce selling at the break of $1,174
Mean Reversion Danger Zone
- Price undercut the lower Bollinger Band at $1,148.59 (a classic "snapback" warning for bears)
- The last candle just barely closed back above $1,146—historically a magnet for quick relief bounces off key fib and BB confluence zones
- Bear trap risk: If bulls defend $1,140-$1,146, a spike back toward $1,200-$1,245 is possible
Bearish Scenarios on the Table
- Stops above $1,180 shield from snapbacks, using 1.5×ATR logic—protects capital even in volatility
- Targets: $1,055 = 200 SMA, $1,034 = 61.8% Fib (major bounce zones), $950 = structural July low
- Risk/Reward: First target offers a "realistic" 1.5x R:R—a must in a chop-prone crude derivative
- Breached $1,146? Shorts get momentum. Bounce above? Step aside, fakeout risk is high.
What to Watch Next
- Invalidation: Bullish case triggers only above $1,265
- Break of $1,140: Opens floodgates for $1,090, then $1,034
- Sustained hold above $1,146: Expect a violent bear rally back to $1,200-$1,245
- Volume and RSI: Relief rally more likely if volume fades as RSI pushes sub-30
Key Lesson: Don’t Chase—Wait for Confirmation
This setup excels as an example of why patience matters. Crude products like London Gas Oil are notorious for shakeouts around major fibs and moving averages.
- Short after breakdown, not before
- When the chart says "maybe bounce," don’t force a position—let price prove the move
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.
How much is hesitation costing you?
Every day you wait is a day the market moves without you. InvestingPro puts institutional-grade data and AI-powered insights in your hands—without the institutional price tag.
Stop waiting. Start investing with confidence.