FUNDAMENTAL OVERVIEW
Oil prices opened higher today following the breakdown of US-Iran negotiations over the weekend. This shouldn’t be a surprise though given the strong divergence in stances ahead of the talks.
There have been reports of US and Iran continuing to exchange messages through diplomatic backchannels, but for now we don’t have any official date for another round of negotiations. The good news is that the ceasefire seems to be holding, but Trump decided to put pressure on Iran by blockading their ports.
This has raised the risk premium for oil prices as a potential breach of the ceasefire is going to keep traders on edge. For now, the downside remains limited until we get an official resolution and the end of the war.
CRUDE OIL TECHNICAL ANALYSIS – DAILY TIMEFRAME
On the daily chart, we can see that crude oil opened higher today after the failed US-Iran negotiations. The price will likely continue to trade in this wide range unless the war escalates again or we finally get a peace deal.
CRUDE OIL TECHNICAL ANALYSIS – 4 HOUR TIMEFRAME
On the 4 hour chart, we can see the price fell into the lower bound of the channel again on Friday which is where the buyers have been stepping in since last week. Right now, we don’t have clear levels where to lean on, so if we get another pullback into the bottom trendline, we can expect the buyers to step in again. The sellers, on the other hand, will have a much better risk to reward setup around the upper bound of the channel if the price gets there. For now, it remains a buyers’ market.
CRUDE OIL TECHNICAL ANALYSIS – 1 HOUR TIMEFRAME
On the 1 hour chart, we have a minor counter-trendline defining the current pullback. The sellers might lean on it with a defined risk above it to extend the pullback into the lower bound of the channel. The buyers, on the other hand, will look for a break to increase the bullish bets into the upper bound of the channel. The red lines define the average daily range for today.
UPCOMING CATALYSTS
Tomorrow we have the US PPI report. On Thursday, we get the latest US Jobless Claims figures. The focus remains on US-Iran headlines.
