Summary:

  • The US withdrawal from the Iran deal encourages traders to buy oil
  • WTI oil prices break a pivotal long-term resistance
  • An increase toward $85 would be possible, what to watch out in the meantime?

Both WTI and Brent prices have been struggling with crucial resistances lately, but they have stayed below them as of yet. However, given the US is already out of the Iranian nuke accord one may expect the oil market could witness some supple shortages going forward (Iranian exports could be curtailed quite appreciably when US slaps new sanctions within 180 days). As a result, there are getting more traders wanting to bet on oil prices even as they keep trading relatively high. Looking into today’s macroeconomic calendar make sure the EIA weekly oil stocks report has not slipped out of your mind as it could matter for the commodity price anyway. Now let us have a closer look at charts.

Monthly (MN1)

A long-term time frame makes us certain that the price already broke above its notable resistance in form of a 50% retracement. It may be viewed as a trend change portending further gains going forward. If so, there is the likelihood to see the price rallying toward sub-$80 followed by another crucial technical line at $85.

link do file download linkFrom a technical angle oil prices could be capable of reaching $85 over the next months. Source: xStation5

Daily (D1)

Meanwhile, looking at the daily time frame one may notice that the 5-wave structure has yet to be negated suggesting that the last impulse within the whole move could prove to be a real long one. The first target might be localized nearby an upper bound of a channel followed by a 61.8% retracement. In turn, looking for any support it’s worth paying a closer attention to a 50% retracement along with $66.5. 

link do file download linkTraders scratch their head how far we can go within the 5th wave. Source: xStation5

4-hourly (H4)

Finally, let us glance at the H4 interval where usage of the overbalance methodology could come in handy. Based on this strategy one may set a range for a possible corrective move – $2 followed by $4.25.

link do file download linkOverbalance seen at the intraday chart. Source: xStation5