FUNDAMENTAL
OVERVIEW
Crude oil weakened
into the US session close yesterday and extended the losses during the Asian
session. There were no bearish catalysts, so it might just have been a
technical move. In fact, this morning prices shot higher and erased all the
losses.
The market might
be losing patience since we haven’t got any new development on the US-Iran side.
Iran’s government spokesperson yesterday said that the Foreign Minister
Araghchi presented to the cabinet “a US proposal”, although no further
details were given.
Trump told
reporters that he must decide whether to “blow them up or make a deal” with
Iran, adding that the conflict would end “very soon, one way or the other”. He’s
been using these same words for several months already, so it’s not something
new.
Looking ahead, it goes without saying that a breakthrough in US-Iran negotiations would
send oil prices quickly lower, while a prolonged stalemate or even a
re-escalation will keep the market supported into new highs.
CRUDE OIL
TECHNICAL ANALYSIS – DAILY TIMEFRAME
On the daily chart, we can
see that crude oil(CFD contract) might be
forming a range near the lower bound of the channel. If the price pulls back into
the lower bound of the channel, we can expect the buyers to step in, with a
defined risk below it, to position for a rally into the 110.00 resistance. The
sellers, on the other hand, will look for a break lower to pile in for a drop
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, we can
see the price broke above the minor downward trendline and extended the gains
as the buyers piled in with more conviction, targeting the 96.77 level. If the
price gets there, we can expect the sellers to step in, with a defined risk
above the level, to position for a drop into the lower bound of the channel.
The buyers, on the other hand, will want to see the price breaking 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 can
see the price broke above the minor resistance zone around the 91.40 level. If
we get a pullback, we can expect the buyers to step in around the
resistance-turned-support to keep pushing into new highs. The sellers, on the
other hand, will want to see the price falling back below the support to extend
the drop into the lower bound of the channel. The red lines define the average daily range for today.
UPCOMING CATALYSTS
Todaywe
get the US ISM Manufacturing PMI and the latest US Jobless Claims figures. Tomorrow,
we conclude the week with the US NFP report. The focus, though, will remain on
US-Iran developments.
This article was written by Giuseppe Dellamotta at investinglive.com.