Oil surges again to $86 as Iran attacks ships in Hormuz – Intraday Analysis

• Oil volatility consolidates but after yesterday's drop, sellers could not sustain lower prices
• WTI attempted a bounce, which points to further range-bound action ahead
• Exploring an in-depth Technical Analysis of the commodity

Yesterday saw a major correction in crude prices, particularly given that it had traded near $120 just two days ago – But it could be reaching its end.

As noted in our past-day Oil analysis, it seems we are now past the largest waves of volatility, with 30% up-and-down moves often translating into much calmer price action afterward. The same happened in Silver at the end of January.

Volatility tends to be a self-fulfilling prophecy, but it quickly exhausts itself! And when it does, Markets seem pretty dull.

It's a weird feeling when even today's 2% move higher feels like nothing really changed.

After dipping to $76 in early afternoon yesterday, following verbal intervention from G7 nations, the commodity quickly bounced back to higher levels as Iran upped their threats:

After the latest mines in Hormuz intel, Iran struck three ships that attempted to cross the Strait – The headlines led to a quick bounce towards $87 before the price action eased again.

This Reuters piece provides great detail into the current situation – It should be free to access.

Despite the ceaseless air strikes and damage to its navy, Iran manages to ship millions of barrels of crude to China, which would explain the growing number of cargoes going through, while Gulf shipments remain in peril.

In other Market news, US CPI just came at 2.4% Y/Y, a better report compared to last month's rise. Traders will be focusing on this month's Core PCE (the Fed's favorite measure) release to see if the ease spreads towards there.

The next FOMC meeting is already coming up next week, and a cut is only priced at 0.7%(!) – Participants will focus on forward communications.

Let's dive right into the key intraday charts for WTI (US) Oil to spot where we stand and what comes next for the commodity.

Read More:

• Markets Today: IEA eyes record breaking oil reserve release as US CPI looms. FTSE 100 falls at 200-day MA
• US Dollar Index (DXY) rises as US inflation in line with forecasts
• Chart alert: EUR/USD bullish reversal, watch the 1.1673 upside trigger level as US CPI looms

The price action has been largely dying off within a still large $83 to $88 range.

Despite the progress in the military conflict, as long as the war continues, there aren't many fundamental reasons for Oil to drag lower. It wouldn't be surprising to see the current consolidation holding for a longer time.

The longer the war lasts, the higher the chances of a slow grind higher, so keep that in mind if you spot a progressive uptrend forming again.

Let's look at further details.

Looking closer, we see how clear the current range is – most candles are stabilizing within the consolidation highs (~$88) and lows (~$83).

Both directions could be played but it is wise to remind that any flash news could lead to sudden spikes – It feels like downward spikes are more probable after recent higher rejection (on any advancement/peace news)

Key levels are bolded.

WTI Technical Levels:

Resistance Levels

• 4H 50-Period MA $88.00
• $89 to $91 Channel and Range highs (Bullish above)
• Resistance $93.50 to $95
• $98 to $100 Resistance
• $106 to $108 June 2022 Resistance
• 2022 and Monday highs $116 to $120

Support Levels

• $82.80 to $84 Range lows
• 2025 Highs Key Support $78 to $80
• Past session lows $76.50
• Past week spike $73.00 to $74.00
• $69 to $70 Main Support
• September 2025 Mid-term Support $67.50 to $68
• 2025 lows $55.00

For intraday traders, keep a close eye on the range extremes and 15M 50 & 200-period Moving Averages (acting as intraday support and resistance respectively)

With prices bouncing from the range lows, check out if sellers come back at the resistance to attempt small mean reversion attempts.

Do keep a close eye on a potential slow but progressive grind higher as days go by without a reopening of the Strait of Hormuz! For this, spot a clear higher low on the 1H timeframe. This isn't the case yet.

Safe Trades, keep track of the advancement of the conflict!

Follow Elior on Twitter/X for additional Market News, Insights and Interactions @EliorManier