Basic overview
Oil prices briefly fell below pre-war levels last week but eventually stabilized above the key 68.00 support area.
The major dismantling should have come to an end now and we could see a long-term consolidation around these levels. The situation in the Strait of Hormuz remains ambiguous, but overall, there is no real collapse at the moment.
The Fed could be the next bearish mover if US data further tightens risks. Next week, we will receive the US CPI report which could be a major catalyst. If we see a decline in inflationary pressures, this could translate into a more pessimistic view on the Fed and keep the downside in oil prices more limited thanks to positive risk sentiment and demand expectations.
Conversely, an upward surprise in the data is likely to lead to another hawkish repricing in interest rate expectations and put further pressure on oil prices.
Technical analysis of crude oil – daily time frame
Crude Oil – Daily
On the daily chart, we can see that crude oil briefly fell below pre-war levels last week but was unable to extend the breakout. Price action was mostly range bound at the 68.00 support area. Buyers continue to intervene with a defined risk below the support level in order to rise to the 78.00 resistance level. On the other hand, sellers are waiting for a downside breakout to increase bearish bets to the 55.00 level next.
Technical analysis of crude oil – 4-hour time frame
Crude oil – 4 hours
On the 4-hour chart, the price appears to be bottoming at the support level. We have a simple downtrend line that defines the bearish structure. We can expect sellers to rely on the trend line with a defined risk above it to continue pushing towards new lows, while buyers will look for a breakout to extend the pullback to the 73.00 level next.
Technical analysis of crude oil – 1 hour time frame
Crude oil – 1 hour
On the 1-hour chart, we have a simple uptrend line outlining the current pullback. We can expect buyers to rely on the trend line with a defined risk below it to continue pushing towards new highs, while sellers will look for a breakout of the buildup in order to fall to new lows. Red lines define Average daily range For today.
Upcoming stimuli
tomorrowwe have the minutes of the Federal Open Market Committee meeting. On Thursday, we will get the latest US unemployment claims numbers.
