Oil prices rebound on escalating US-Iran tensions as ceasefire deadline approaches
FUNDAMENTAL OVERVIEW
Oil prices plunged on Friday following a barrage of positive news. It all started with an Axios report saying that under a compromise proposal under discussion, some of the highly Iran’s enriched uranium would be shipped to a third country, not necessarily the US, and some of it would be down-blended in Iran under international monitoring. In return, the US would release $20 billion in frozen Iranian funds. Trump denied the release of the funds but more reports citing officials talked about this potential compromise.
The selloff then gathered steam after Iranian Foreign Minister Aragchi announced that the passage for all commercial vessels through the Strait of Hormuz was declared completely open for the remaining period of the ceasefire. Trump followed up with a post on Truth Social thanking Iran and even calling the Strait the “Strait of Iran”. Finally, Trump told reporters that he expected a deal in a day or two and prohibited Israel from bombing Lebanon.
Everything pointed to a deal and to the end of the war, but we started to see a rebound in prices into the weekend after Trump said that the US would keep the blockade of the Strait of Hormuz in place until a deal with Iran is finalized. The more conservative traders got vindicated as the market opened with a positive gap following renewed tensions over the weekend after Iran closed the Strait again in retaliation of the US blockade.
The good news is that the ceasefire is holding and we are still getting reports of ongoing talks and preference for a diplomatic resolution. The bad news is that the ceasefire is expiring tomorrow unless we get another extension which is what the market expects. This might keep oil prices supported into the deadline.
CRUDE OIL TECHNICAL ANALYSIS – DAILY TIMEFRAME
On the daily chart, we can see that crude oil eventually extended the selloff into the 78.00 support where the price bounced as the buyers stepped in with a defined risk below the support to position for a rally back into the 93.00 resistance. If the price gets there, we can expect the sellers to pile in to position for another drop into the 78.00 support. The buyers, on the other hand, will look for a break higher to increase the bullish bets into the 120.00 level next.
CRUDE OIL TECHNICAL ANALYSIS – 4 HOUR TIMEFRAME
On the 4 hour chart, we have a downward trendline defining the bearish momentum. We can expect the sellers to lean on the trendline with a defined risk above it to keep pushing into new lows. The buyers, on the other hand, will look for a break to increase the bullish bets into the resistance.
CRUDE OIL TECHNICAL ANALYSIS – 1 HOUR TIMEFRAME
On the 1 hour chart, there’s not much we can add here but given the proximity of the trendline to the resistance, the sellers might want to split their positions between the trendline and the resistance to position for new lows. The buyers, on the other hand, will look for upside breaks to increase the bullish bets into new highs. The red lines define the average daily range for today.
UPCOMING CATALYSTS
Tomorrow we have the US Retail Sales. On Thursday, we get the latest US Jobless Claims figures and the US PMIs. The focus remains on US-Iran headlines ahead of the ceasefire deadline tomorrow.
This article was written by Giuseppe Dellamotta at investinglive.com.提供 MainLink：Investinglive RSS Breaking News Feed
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