Oil prices continue to surge amid heightened US-Iran tensions and renewed supply fears
FUNDAMENTAL OVERVIEW
Oil prices surged considerably this week as US-Iran risks resurfaced after both countries exchanged attacks. Yesterday, it looked like we were going back to pre-MoU situation as the US launched a series of strikes on Iran in response to Iranian attacks on three vessels in the Strait of Hormuz. Iran retaliated by bombing US bases in Bahrain and Kuwait, warning of further strikes if the US continued.
Moreover, Trump said to reporters at the NATO summit in Turkey that the Memorandum of Understanding was over for him and he didn’t want to engage with Iran anymore. Luckily, Trump delivered quickly the usual “TACO” moment when he said that he doesn’t think the war is going to restart. Later, he also claimed that the Iranians called him because they want to make a deal.
The de-escalation led to a pullback as the geopolitical risk premium eased a bit. Nevertheless, the risks are still present and the traffic in the Strait of Hormuz took a hit following the latest attacks. Looking ahead, more de-escalating news should keep a lid on oil prices as we approach the US CPI report.
If the CPI comes out lower than expected, it might add support to crude oil on positive demand outlook and lower Fed tightening risk. On the other hand, an upside surprise in the data could weigh on the market on a hawkish repricing.
CRUDE OIL TECHNICAL ANALYSIS – DAILY TIMEFRAME
On the daily chart, we can see that crude oil eventually picked up from the 68.00 support following the US-Iran escalation. The natural target should be the resistance around the 78.00 handle. 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 68.00 support. The buyers, on the other hand, will want to see the price breaking higher to increase the bullish bets into the 88.00 handle next.
CRUDE OIL TECHNICAL ANALYSIS – 4 HOUR TIMEFRAME
On the 4 hour chart, we can see the break above the downward trendline and the minor 72.50 resistance increased the momentum as more buyers piled in. The price pulled back to retest the minor resistance-turned-support. The buyers will likely step in around these levels with a defined risk below the support to keep pushing into new highs. The sellers, on the other hand, will want to see the price breaking lower to pile in for a drop back into the 68.00 level.
CRUDE OIL TECHNICAL ANALYSIS – 1 HOUR TIMEFRAME
On the 1 hour chart, we have a minor downward trendline defining the current pullback. The sellers will likely 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 higher to increase the bullish bets into the 78.00 resistance. The red lines define the average daily range for today.
UPCOMING CATALYSTS
Today, we get the latest US Jobless Claims figures but traders will continue to focus on the latest US-Iran escalation.
This article was written by flfeaa2662d774455a8d50fa77b791ed5f at investinglive.com.提供 MainLink：Investinglive RSS Breaking News Feed
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