Oil prices hover around pre-war levels as focus turns to the US data and the Fed
FUNDAMENTAL
OVERVIEW
Oil prices have finally reached the pre-war levels
last week as the reopening of the Strait of Hormuz and the end of the US-Iran
war triggered a quick unwinding of the bullish oil bets.
We got some minor strikes between US and Iran over the
weekend but that’s just noise. The two sides are still committed to the
ceasefire and to keep the Strait operational.
The bearish bias remains intact as traders continue to
price in the increase in supply in the next months. Another bearish driver is
the Fed’s tightening risk as that’s going to weigh on the demand side.
The upside risks in the short-term are mostly two. The first is that things
between the US and Iran break down again and the Strait of Hormuz gets shut.
The second is that the US activity data remains strong, but we see an easing in
inflationary pressures which could translate into a more dovish view on the Fed
and keep the downside in oil prices more limited on resilient demand.
CRUDE OIL
TECHNICAL ANALYSIS – DAILY TIMEFRAME
On the daily chart, we can
see that crude oil eventually reached the pre-war levels filling the
68.00-69.00 gap. This is going to act as support. We can expect the buyers to
step in with a defined risk below the support to position for a rally into the
78.00 resistance. The sellers, on the other hand, will want to see the price
breaking lower to increase the bearish bets into the 55.00 handle next.
CRUDE OIL TECHNICAL
ANALYSIS – 4 HOUR TIMEFRAME
On the 4 hour chart, there’s
not much we can add here as the buyers will likely continue to step in around
the support, while the sellers will either wait for a pullback into the 78.00
resistance or a break below the 68.00 support.
CRUDE OIL TECHNICAL
ANALYSIS – 1 HOUR TIMEFRAME
On the 1 hour chart, we
have a minor resistance zone around the 73.00 handle where the price got
rejected from several times in the past days. If we get a pullback, we can
expect the sellers to step in around the resistance with a defined risk above
it to keep pushing into new lows. The buyers, on the other hand, will look for
a break to extend the pullback into the 78.00 resistance next. The red lines
define the average daily range for today.
UPCOMING CATALYSTS
Tomorrow, we get the US Job
Openings data and the US Consumer Confidence report. On Wednesday, we have the
US ADP report and the US ISM Manufacturing PMI. On Thursday, we conclude with
the US NFP report, and the US Jobless Claims figures.
This article was written by Giuseppe Dellamotta at investinglive.com.