Brent crude reaches a two-week peak but encounters stiff resistance near the $110 area.

Brent crude surged to a two-week high in early Monday trading, building on last week’s 4.5% rally as escalating tensions in the Middle East and diminishing hopes for a peace agreement continued to support oil prices following the latest attack on a nuclear facility in the UAE.

The latest bullish extension from the May 7 higher low at $96.09 briefly pushed through the key psychological $110 barrier, with prices peaking at $111.97 before retreating back below $110, signaling that bullish momentum may be starting to fade.

Daily chart studies point to weakening positive momentum, while overbought stochastic indicators suggest the market could enter a phase of limited profit-taking before attempting another move higher, particularly if geopolitical conditions fail to improve.

Any corrective pullbacks are expected to find solid support around the $106.20/$105.80 zone, marked by Friday’s low and the converged 10- and 20-day moving averages. Holding above this area would keep bullish sentiment intact and support another attempt to establish a sustained break above $110, potentially opening the way toward $115.26, the May 4 peak, ahead of the major resistance zone near $120.

On the downside, a break below the $106 support region would weaken the near-term structure and increase the risk of a deeper correction toward the daily Tenkan-sen at $104.02 and the daily cloud top at $102.33.

Res: 111.59; 111.97; 113.82; 114.41
Sup: 108.50; 106.72; 105.80; 104.02