Oil prices consolidate – What defines the current trading range?

Oil is one of the most traditionally volatile commodity and tradable asset..

Since the Israel-Iran War, however, there haven't been many highlights in the geopolitical landscape that have warranted any substantial movement for the Black Gold, leading to an ongoing month-long consolidation.

Since the war's end, the situation hasn’t changed much, even regarding the tariffs, where we haven’t seen any real progress in a while.

However, global trade prospects have been progressively increasing as businesses have already taken the tariffs into account and tried to reroute their supply chains to limit future raise in costs.

Oil prices are usually based on such prospects, and having become less pessimistic, Oil is still 6% higher than it was at the mid-point of the $60.5 to $64 May Range.

Let's look at the current range and what candles point towards.

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Prices have been consolidating between the darker Support and Resistance zones since the $78.40 war highs got met with a significant correction, hitting lows of $65 as the Ceasefire between Israel and Iran had been reached.

Daily RSI momentum is rangebound in the neutral zone (blue square) and prices are logged between the MA 200 acting as resistance (At 68.55) and the 50-Day MA acting as immediate support (66.31)

Levels to spot for oil trading:

Support Levels:

• $65 to $66 Support Zone (low of range)
• $64 High of May range
• $60.5 Low of May range

Resistance Levels:

• 69.5–$70.5 Intermediate Resistance Zone (High of range)
• Intermediate Resistance $72 to $73
• Main Resistance: $75 to $76

Rangebound action doesn't infer much from the 4H timeframe, hence the reason why we're moving closer directly.

The action is decidedly rangebound, but one thing to monitor is how bulls couldn't use the May low trendline to push up prices, with that trendline coming in as resistance on a break-retest technical pattern.

Sellers will want to push prices below the immediate support Zone and hold below the 50-day MA before they take the hand.

The 200-period 1H MA is starting to edge lower, which could support further a break below.

One thing however is that before the range breaks, the probabilities are higher for it to hold – Which was the case even for USDJPY for example as every participant was shouting about the weakness in the Yen.

In the absence of catalysts and better or worse growth/trade tariffs prospects, it seems that the path is still rangebound but bulls will have to hold the support zone where prices are currently trading.

To help you trade ranges, you can take a look at this piece I wrote almost two months ago!

Safe Trades!