What Happened
WTI crude oil surged more than 3% on Tuesday, pushing back above the $68.00 handle as markets reacted to deteriorating US-Iran diplomatic prospects. The Strait of Hormuz โ through which roughly 20% of global oil supply passes โ remains at the centre of supply disruption fears, keeping a firm floor under prices.
Key Levels
- Support 1: $66.50 โ recent intraday low and short-term demand zone
- Support 2: $64.00 โ April swing low and key structural floor
- Resistance 1: $69.50 โ Tuesday session high and near-term ceiling
- Resistance 2: $72.00 โ 50-day moving average confluence and prior consolidation zone
Technical Picture
WTI had been trending lower since mid-April, but Tuesday’s sharp bounce has put the short-term downtrend under pressure. Price is now testing the 20-day moving average near $68.50. The RSI has bounced from oversold territory (below 30) back toward 50, suggesting momentum is shifting in favour of buyers. However, the broader trend remains bearish until price reclaims $72.00 on a closing basis.
What Traders Are Watching
The immediate focus is whether WTI can close above $69.50 โ a sustained break here would open the door to a run toward $72.00. On the downside, a failure to hold $66.50 would signal the bounce is fading and put $64.00 back in play. Traders will also be monitoring any US-Iran diplomatic developments or OPEC+ commentary that could shift the supply narrative quickly.
Bias
Bullish short-term โ Geopolitical risk premium is being repriced back into oil with Hormuz tensions unresolved. Until there is a credible diplomatic breakthrough, dips are likely to attract buyers. However, the medium-term trend remains cautious given demand uncertainty.
Source: FXStreet โ WTI Price Forecast