Crude oil extended the selloff yesterday after Al Arabiya reported that the US and Iran had made concessions regarding the Iranian nuclear program and frozen funds, and that Washington had approved the draft of the Memorandum of Understanding. The report also added that the announcement would be made step by step and simultaneously.
The bearish momentum then faded when Iran’s Secretary of Supreme National Security Council said that the US response to Tehran’s demands wasn’t convincing and IRIB news reported that claims of US and Iran being close to a deal were wrong.
Trump reiterated that the US has no immediate plan to attack Iran, but you never know with Trump, especially now that he lost the midterm elections. The risk is that he escalates the war further now that he doesn’t have much to lose.
This risk is likely to keep the downside in oil prices limited until we get a clear breakthrough in the negotiations.
CRUDE OIL TECHNICAL ANALYSIS – DAILY TIMEFRAME
On the daily chart, we can see that crude oil(CFD contract) extended the losses into the lower bound of the channel yesterday before bouncing. We can expect the buyers to continue to step in around the lower bound of the channel, with a defined risk below it, to position for a rally into the 110.00 resistance. The sellers, on the other hand, will want to see the price breaking lower to increase the bearish bets into the 68.00 support next, with the 87.00 handle as the first target.
CRUDE OIL TECHNICAL ANALYSIS – 4 HOUR TIMEFRAME
On the 4 hour chart, we can see the price is now consolidating near the lower bound of the channel. The swing high around the 98.82 level could act as resistance. If the price gets there, we can expect the sellers to step in, with a defined risk above the level, to target a break below the channel. The buyers, on the other hand, will want to see the price breaking above the level to increase the bullish bets into the 110.00 resistance next.
CRUDE OIL TECHNICAL ANALYSIS – 1 HOUR TIMEFRAME
On the 1 hour chart, there’s not much we can add here as the buyers will continue to step in around the lower bound of the channel, while the sellers will look for a break below the channel or a rejection around the 98.82 level to target new lows. The red lines define the average daily range for today.
UPCOMING CATALYSTS
Todaywe have the US ADP and the US ISM Services PMI. Tomorrow, we get the latest US Jobless Claims figures. On Friday, we conclude the week with the US NFP report and the University of Michigan Consumer sentiment survey. The focus will remain on US-Iran negotiations.
This article was written by Giuseppe Dellamotta at investinglive.com.
Source: Investing Live - News
