Crude oil moved sharply lower today on hopes for a diplomatic solution to the conflict in Iran — or at least progress toward a framework for peace through a Memorandum of Agreement. The selloff pushed the price down to a low of $90.32, where buyers stepped in near an upward-sloping trend line connecting the late-February low to the April low. Holding support at that trend line gave dip buyers a clear risk-defining level to lean against, helping to slow the downside momentum.
Since bottoming at $90.32, price action has stabilized and traded mostly between $90.32 and $92.71. Those levels are now the key near-term support and resistance barometers for traders. A break below $90.32 would increase the bearish bias and shift attention toward the May low at $88.66. A move below that level could open the door for a deeper corrective decline.
On the topside, if buyers can push the price back above $92.71, traders may start to target Friday’s low at $94.73. A move back above that level would suggest the market is becoming less confident that a lasting diplomatic solution will be reached quickly. A swing area between $96.34 and $97.34 (see yellow area on the chart above).
