Crude oil has entered a consolidation phase recently as markets await new
US-Iran developments. So far, nothing has changed.
Trump told CNN
that the US is unlikely to resume military action against Iran if negotiations
make sufficient progress on Tehran’s nuclear programme and the reopening of the
Strait of Hormuz. However, he stressed that any decision to avoid further
strikes would depend on Iran agreeing to a strong enough deal, adding that the
US remains ready to take military action if necessary.
US Secretary of
State Rubio said negotiations with Iran have made little progress, describing
Tehran’s demands as unacceptable, but stressed that Washington remains open to
pursuing a diplomatic resolution.
US military strikes remain an option as Trump could consider limited
strikes against Iranian nuclear facilities rather than broader attacks on
energy infrastructure.
A breakthrough in negotiations would trigger a significant selloff and take
oil prices back to pre-war levels relatively quickly. An escalation, on the
other hand, could trigger another rally on a rising risk premium, although
there’s also a chance that it could be short-lived if Trump launches limited
strikes just to save face before exiting the war.
CRUDE OIL
TECHNICAL ANALYSIS – DAILY TIMEFRAME
On the daily chart, we can
see that crude oil (CFD contract) is consolidating
near the key 87.00 handle. We can expect the buyers to continue to step in around
these levels, with a defined risk below the 87.00 level, to position for a
rally into the 110.00 resistance. The sellers, on the other hand, will look for
a break to increase the bearish bets into the 68.00 support next, with the
80.00 handle as the first target.
CRUDE OIL TECHNICAL
ANALYSIS – 4 HOUR TIMEFRAME
On the 4 hour chart, there’s
not much we can glean from this timeframe, but the broken channel could act as
resistance in case the price retests the bottom trendline. We can expect the
sellers to step in there, with a defined risk above the trendline, to keep
targeting new lows. The buyers, on the other hand, will look for a break higher
to increase the bullish bets into the 110.00 resistance next.
CRUDE OIL TECHNICAL
ANALYSIS – 1 HOUR TIMEFRAME
On the 1 hour chart, we
have a minor support zone around the 89.00 level where the price got rejected
from a few times in the past days. The buyers will likely continue to step in
around the support, with a defined risk below it, to keep pushing into new
highs. The sellers will want to see the price breaking lower to extend the pullback
into the 87.00 level next. The red lines define the average daily range for today.
UPCOMING CATALYSTS
Tomorrow we have
the US CPI report. On Thursday, we get the latest US Jobless Claims figures. On
Friday, we conclude the week with the US PPI data. The focus will remain on
US-Iran developments.
This article was written by Giuseppe Dellamotta at investinglive.com.
