Crude oil bounced from a key trendline yesterday after we got reports that
the US was reducing its troop presence at bases across the region and cutting
staffing at diplomatic missions amid rising security risks. The bullish
momentum then picked up after The New York Times reported that the US and
Israeli militaries had developed plans for renewed strikes on Iran following
the US midterm elections, with additional forces expected to be fully deployed
by early November.
Meanwhile, the Saudi-Houthi conflict continues to pose a significant threat
to energy infrastructure. The Houthis have intensified further the attacks
against Saudi Arabia, targeting airports, military facilities and energy
assets.
Looking ahead, crude oil remains supported amid the escalating tensions in
the Middle East and the prospects of another US attack against Iran after the
midterms. Unless we get a de-escalation in the Saudi-Houthi conflict or a
surprising breakthrough in US-Iran negotiations, oil prices will likely
continue to rise.
CRUDE OIL
TECHNICAL ANALYSIS – DAILY TIMEFRAME
On the daily chart, we can
see that crude oil(CFD contract) has been
consolidating above the 96.77 level, although the momentum seems to be picking
up amid renewed Middle East tensions. The buyers will likely continue to pile
in around these levels, with a defined risk below the 96.77 level, to keep
targeting the 110.00 resistance. If the price gets there, we can expect the
sellers to step in, with a defined risk above the resistance, to position for a
drop back into the lower bound of the channel.
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, there’s
not much we can add here as the buyers will continue to have a better risk to
reward setup around the trendline, while the sellers will need a break below
the trendline and the 96.77 level to target a deeper pullback into the lower
bound of the channel. The red lines define the average daily range for today.
UPCOMING CATALYSTS
Today we get the latest US
Jobless Claims figures, while tomorrow we conclude the week with the US Flash
PMIs. The focus will remain on the Middle East developments.
This article was written by Giuseppe Dellamotta at investinglive.com.