FUNDAMENTAL OVERVIEW
Oil prices dived on Wednesday after Trump announced on Truth Social a two-sided ceasefire agreement for two weeks while the US and Iran negotiate a lasting peace deal. Since then, the price action became more rangebound due to Israeli attacks against Lebanon which the Iranians have been saying was part of the ceasefire agreement.
The good news is that Iran held off from retaliating ahead of the peace talks in Islamabad this weekend. But the uncertainty has been keeping the markets in check, nonetheless. The Strait of Hormuz remains basically closed and the Iranians are just letting a limited number of ships to cross it. Trump has already complained about this on Truth Social, but for now both sides are holding off from breaking the ceasefire.
Everything hinges on these peace talks as the restart of the war would trigger another surge in oil prices. On the other hand, a peace deal would lead to another selloff in crude oil potentially bringing prices back to pre-war levels.
CRUDE OIL TECHNICAL ANALYSIS – DAILY TIMEFRAME
On the daily chart, we can see that crude oil bounced around the 93.00 support zone as the buyers stepped in with a defined risk below the support to position for a rally back into the highs. The sellers will want to see the price falling below the support to pile in for a drop into the 78.00 support next.
CRUDE OIL TECHNICAL ANALYSIS – 4 HOUR TIMEFRAME
On the 4 hour chart, we can see the price has been rejecting the support and the lower bound of the channel as the buyers continue to pile in for a rally into new highs. We can expect the buyers to continue to lean on the support and the bottom trendline to keep pushing into new highs, while the sellers will need a break lower to open the door for new lows.
CRUDE OIL TECHNICAL ANALYSIS – 1 HOUR TIMEFRAME
On the 1 hour chart, there’s not much we can add here as the price action has been messy not giving any clear level where to lean on except the major support and the lower bound of the channel. The buyers should keep on leaning on the bottom trendline and the support, while the sellers should wait for a break below the support to pile in for new lows. The red lines define the average daily range for today.
UPCOMING CATALYSTS
Today we conclude the week with the US CPI report and the University of Michigan Consumer Sentiment survey. The US-Iran negotiations are expected to begin tomorrow now but we still might get some headline today, so keep an eye on that.
