The financial markets were rattled yesterday following a tweet by President Trump. In the tweet, the president focused his attention to Russia’s Vladimir Putin and his response to the Syrian crisis. The tweet signaled that the escalation in Syria could lead to significant issues between the US, Russia, Iran, and Israel.
The problem started when a chemical attack happened in Syria. The Trump administration blamed Syrian president Bashir Al Assad for the attack that left many people dead. On the other hand, the Syrian regime and Russians blamed the rebels for the attack.
Common sense indicates that the issue could be more complicated. This is because last week, Trump asked his military officials to come up with a plan to get out of Syria. As such, a chemical attack by Assad would have been counterproductive because it would demand more US actions.
As a result of the statement, crude oil prices surged yesterday reaching a three year high. Brent reached a high of $73 a barrel while WTI touched a high of $68 a barrel.
As shown below, as the Brent crude oil surged, it completed the impulse Elliot Wave. As such, there is a likelihood that the price could retrace as it starts a corrective wave. As such, traders should watch out for the $71 level.