FUNDAMENTAL
OVERVIEW

Oil prices jumped yesterday
after a couple of negative headlines seemed to point that the Islamabad talks
were dead on arrival with Iran refusing to participate until the US blockade in
the Strait of Hormuz was lifted.

Prices eased though after
Trump extended the ceasefire (unsurprisingly) to allow more time for Tehran to
put forward a proposal to end the war. There’s no deadline for this latest
extension, so we might just get stuck in this new situation until the bombs
start dropping again or they finally reach a deal.

This morning, the sentiment
has been a bit more positive after Tasnim
reported that
Iran received ‘some sign’ the US is ready to break the blockade which is giving
traders hope that the talks are going to happen soon.

The price action continues
to be driven by US-Iran headlines, and this is unlikely to change until we get
an official resolution. For now, the path of least resistance remains to the
downside amid the optimistic expectations but traders will keep a close eye on escalation
signals.

CRUDE OIL
TECHNICAL ANALYSIS – DAILY TIMEFRAME

On the daily chart, we can
see that crude oil is pulling back into the 93.00 resistance zone. That’s where
we can expect the sellers to step in with a defined risk above the resistance
to position for a drop back 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 can
see the price broke above the downward trendline yesterday and extended the
gains as more buyers piled in on the breakout. Again, the sellers will likely
step in around the resistance to position for new lows, while the buyers will
look for a break higher to increase the bullish bets into the 105.00 level
next.

CRUDE OIL TECHNICAL
ANALYSIS – 1 HOUR TIMEFRAME

On the 1 hour chart, there’s
not much we can add here as from a risk management perspective, the sellers
will have a better risk to reward setup around the resistance, while the buyers
will need a breakout to open the door for new highs. The red lines define the average daily range for today.

UPCOMING CATALYSTS

Tomorrow we get the latest US Jobless Claims figures and the US PMIs. The
focus remains on US-Iran headlines.