FUNDAMENTAL
OVERVIEW
Oil prices remain supported amid the ongoing US-Iran
conflict as both sides continue to exchange strikes and the Strait of Hormuz
remains in a de facto closure. In addition to that, we now have shipping disruptions in the Red Sea as well after the Houthis announced a naval blockade on Saudi Arabia on Monday.
Despite the military escalation, diplomatic efforts to
restore a ceasefire continue. Reuters reported that mediators have floated
proposals aimed at reviving negotiations between Tehran and Washington.
There’s not much to add on the fundamental side as the
price action continues to be driven by US-Iran headlines. As long as the crisis
persists, oil prices will remain well supported into new highs. Positive news
will continue to trigger pullbacks, while more concrete signs of de-escalation
could mark the top and reverse the trend.
CRUDE OIL
TECHNICAL ANALYSIS – DAILY TIMEFRAME
On the daily chart, we can
see that crude oil reached the major downward trendline around the 88.00 handle
and it’s now rejecting it as the sellers are stepping in with a defined risk
above the trendline to position for a drop back into the 78.00 support. The
buyers will want to see the price breaking higher to open the door for a rally
into the 96.00 handle next.
CRUDE OIL TECHNICAL
ANALYSIS – 4 HOUR TIMEFRAME
On the 4 hour chart, we have
an upward trendline defining the bullish structure. If we get a pullback, we
can expect the buyers 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 increase the bearish bets into the 78.00 support
next.
CRUDE OIL TECHNICAL
ANALYSIS – 1 HOUR TIMEFRAME
On the 1 hour chart, we have
another minor upward trendline defining the bullish momentum on this timeframe.
More aggressive buyers will likely lean on the trendline to keep targeting new
highs, while the sellers will look for a break to extend the pullback into the
next trendline. The red lines define the average daily range for today.
UPCOMING CATALYSTS
Tomorrow, we get the latest
US Jobless Claims figures, while on Friday we conclude the week with the Flash
US PMIs. The focus remains on US-Iran headlines.
This article was written by Giuseppe Dellamotta at investinglive.com.