Crude oil came under renewed
pressure yesterday after we got some positive headlines that increased hopes
for a US-Iran deal.
It was reported
that meetings between Trump, Vance and the Qatari PM were positive, and they
discussed ways to progress talks with Iran.
Trump said after
talks with the Qatari PM that Qatar would rather see a peaceful solution with
Iran, but the US is ready for strikes if necessary.
Moreover, it was
reported that the US has allowed a small uranium enrichment inside Iran, which
Tehran agreed to, and preliminary agreement on reducing uranium enrichment is
likely.
Keep in mind that US military strikes remain an option as Trump could
consider limited strikes against Iranian nuclear facilities rather than broader
attacks on energy infrastructure.
A concrete 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) broke below
the key 87.00 handle yesterday and opened the door for new lows. The sellers
piled in on the break and will likely continue to target the 80.00 level. If
the price gets there, we can expect the buyers to step in, with a defined risk
below the 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.
CRUDE OIL TECHNICAL
ANALYSIS – 4 HOUR TIMEFRAME
On the 4 hour chart, we now
have a downward trendline defining the bearish momentum. If we get a pullback,
we can expect the sellers to step in around the trendline, with a defined risk
above it, to keep targeting the 80.00 level. The buyers, on the other hand,
will want to see the price breaking higher to pile in for a rally into the
110.00 resistance next.
CRUDE OIL TECHNICAL
ANALYSIS – 1 HOUR TIMEFRAME
On the 1 hour chart, we
have a minor downward trendline acting as resistance. The sellers will likely
continue to lean on it, with a defined risk above it, to keep pushing into new
lows. The buyers, on the other hand, will look for a break higher to extend the
pullback into the major downward trendline. The red lines define the average daily range for today.
UPCOMING CATALYSTS
Today 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.