Crude oil came under some
pressure yesterday after Iran’s state media
reported that Iran’s security chief met with the Supreme Leader Khamenei.
Sources said that Khamenei stressed in the meeting the
importance of pursuing Iran’s interests and implementing its conditions with
the aim of ending the war and the stalemate situation.
It was just a quick headline with little substance,
but market’s expectations for a potential US-Iran deal strengthened, nonetheless.
This morning, Reuters reported that Qatari mediators
presented Iran with new draft deal in Tehran on Sunday and that Iran is considering
the proposal, with response expected by the end of the week. The report added
that the draft sets a seven-day timeline addressing both sides’ concerns, each
side must make daily confidence-building steps.
The news weighed on oil prices for a little bit until
we got a senior Iranian official saying that Qatar has not offered a fresh plan
to stop hostilities with the US and Qatar’s ideas are unacceptable to Tehran.
He added that Iran’s firm stance on nuclear issues remains unchanged.
All in all, crude
oil 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) is still consolidating
around recent highs as US-Iran deal optimism strengthened. 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
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 drop into the lower bound of the channel.
CRUDE OIL TECHNICAL
ANALYSIS – 1 HOUR TIMEFRAME
On the 1 hour chart, we
have a minor downward trendline defining the current pullback. The sellers will
likely continue to lean on the trendline, with a defined risk above it, to keep
targeting a break below the upward trendline. The buyers, on the other hand,
will want to see the price breaking higher to increase the bullish bets into
the 110.00 resistance. The red lines define the average daily range for today.
UPCOMING CATALYSTS
Todaywe have the FOMC rate decision. Tomorrow, we get the
US GDP report, the US PCE and the latest US Jobless Claims figures. On Friday,
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.