Oil prices dive after US-Iran ceasefire agreement; focus turns to Friday's negotiations

FUNDAMENTAL
OVERVIEWOil prices dived today after
Trump announced on Truth Social a two-sided ceasefire agreement for two weeks
while the US and Iran negotiate a lasting peace deal. The ceasefire included
the reopening of the Strait of Hormuz as condition. The discussions will begin
on Friday in Islamabad and may be extended if both parties agree. There’s still a risk that
the war could restart any time as the US and Iran haven’t officially ended the
hostilities. Nonetheless, the bias has now turned bearish for crude oil given Iran’s
acceptance of the ceasefire despite being against it for a long time. This will
likely keep expectations positive for the negotiations.It goes without saying that
if the negotiations fail and the conflict resumes, oil prices will quickly rise
back to pre-ceasefire levels and might even extend into new highs. CRUDE OIL
TECHNICAL ANALYSIS – DAILY TIMEFRAMEOn the daily chart, we can
see that crude oil plummeted into the 93.00 support zone before pulling back a
bit. That’s where the buyers stepped back in with a defined risk below the
support to position for a rally into new highs. The sellers, on the other hand,
will look for a break to increase the bearish bets into new lows.CRUDE OIL TECHNICAL
ANALYSIS – 4 HOUR TIMEFRAMEOn the 4 hour chart, we can
see the price rejected several times the upper bound of the channel and
eventually dropped quickly to the bottom trendline following the ceasefire
announcement. Again, we can expect the buyers to step in around the support and
the lower bound of the channel to position for a rally back into the top trendline,
while the sellers will look for a break lower to extend the drop into new lows.CRUDE OIL TECHNICAL
ANALYSIS – 1 HOUR TIMEFRAMEOn the 1 hour chart, we can
see the price is trading at the lower bound of the average daily range for today. In such instances, we
can generally see some consolidation or a pullback before the next move.UPCOMING CATALYSTSTomorrow we get the US PCE price index and the latest US Jobless Claims
figures. On Friday, we conclude the week with the US CPI report and the
University of Michigan Consumer Sentiment survey. As a reminder, we have also
the US-Iran negotiations in Islamabad on Friday.
This article was written by Giuseppe Dellamotta at investinglive.com.

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