Crude oil extended
the gains yesterday into new highs as the lack of positive developments in the Middle
East continues to support oil prices. The US-Iran negotiations have stalled
over the conditions for reopening the Strait of Hormuz.
The US insists
that Iran needs to address the nuclear programme first, while Tehran continues
to prioritise its conditions, which include the lifting of the US blockade.
Iran has
intensified the disruptions in the Strait of Hormuz, with reports of vessels
being struck and container ships sinking after hitting naval mines. Iranian
officials have also said that they are using new tactics to target ships.
Meanwhile, the
conflict between Saudi Arabia and the Houthis rages on. Houthi attacks have
targeted Saudi airports and Aramco facilities, while Saudi forces have
retaliated with strikes against Houthi-controlled areas in Yemen.
The key catalysts
to watch are any progress in US–Iran negotiations and de-escalation in the
Saudi-Houthis conflict. Trump has ruled out military escalation ahead of the US
midterm elections, but if there is any, we can expect oil prices to surge
further.
CRUDE OIL
TECHNICAL ANALYSIS – DAILY TIMEFRAME
On the daily chart, we can
see that crude oil (CFD contract) has briefly
probed above the 96.77 level but eventually fell back below it. The sellers
piled in around that level, with a defined risk above it, to position for a drop
back into the lower bound of the channel. The buyers will need a break above
the 96.77 level to open the door for a rally into the 110.00 resistance next.
CRUDE OIL TECHNICAL
ANALYSIS – 4 HOUR TIMEFRAME
On the 4 hour chart, we have
a minor upward trendline defining the bullish momentum. The buyers will likely
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 look for a break
lower to extend the pullback 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 buyers will have a better risk to reward setup around
the trendline, while the sellers will need a break to extend the pullback
further. The red lines define the average daily range for today.
This article was written by Giuseppe Dellamotta at investinglive.com.
