Crude oil continues to
consolidate around weekly highs as renewed prospects for a US-Iran deal helped
limit the upside. Just earlier, Semafor
reported that the Trump administration is involved in discussions aimed at
securing a temporary peace deal with Iran. Vice President JD Vance has
reportedly sent a letter to Tehran in an effort to revive negotiations.
An administration official
told Semafor that US forces could resume combat operations shortly after the
midterm elections, with the military reportedly requiring only presidential
authorization. However, several officials remain sceptical about escalating the
conflict, while Trump is reportedly the most open to military action, despite
still having reservations.
Meanwhile, the Saudi-Houthi
conflict continues which adds to upside risks. All in all, the market remains supported amid the Middle East tensions and the possibility of
another US attack after the US midterm elections. We would need a de-escalation
in the Saudi-Houthi conflict or a surprising breakthrough in US-Iran
negotiations to get a significant correction in oil prices.
CRUDE OIL
TECHNICAL ANALYSIS – DAILY TIMEFRAME
On the daily chart, we can
see that crude oil (CFD contract) has been consolidating
around recent highs for almost a week as we’ve started to see a stronger push
for US-Iran deal. Technically, there’s not much we can glean from this
timeframe as the most important levels remain the lower bound of the channel
and the resistance around the 110.00 level, so we need to zoom in to see some
more details.
CRUDE OIL TECHNICAL
ANALYSIS – 4 HOUR TIMEFRAME
On the 4 hour chart, we have
the upward trendline defining the bullish momentum. The buyers continue to lean
on the trendline, with a defined risk below it, to keep pushing into new highs.
The sellers, on the other hand, will want to see the price breaking lower to pile
in for a correction into the lower bound of the channel.
CRUDE OIL TECHNICAL
ANALYSIS – 1 HOUR TIMEFRAME
On the 1 hour chart, there’s
not much we can add here as the choppy price action could lead to many fakeouts.
The buyers continue to have a better risk to reward setup around the trendline,
while the sellers will need a break below it to open the door for new lows. The
red lines define the average daily range for today.
UPCOMING CATALYSTS
Today we get the US GDP report, the US PCE and the latest US
Jobless Claims figures. Tomorrow, we conclude the week with the US Employment
Cost Index. The focus will remain on the Middle East developments.
This article was written by Giuseppe Dellamotta at investinglive.com.
