Not a good look for risk trades so far in European trading as sentiment continues to erode further, with oil suffering a further drop to start the new week.

Price is now dropping below $70 in a fall by close to 3%, as a stronger dollar (softer risk mood) weighs further following the drop after OPEC+ formalised a deal over the weekend.

I’m still siding with a more bullish long-term outlook for oil but the latest pullback is not one that should be underestimated.

With risk trades potentially pulling back further, we could see a sharper drop if there is a daily break below $70 before longs may feel more comfortable coming back in closer to the 100-day moving average (red line), now seen @ $66.20.