Crude Oil on Path to $90 as the Peace Trade Continues – WTI Technical Analysis

Market Overview

WTI Crude Oil has experienced a significant decline, dropping sharply after reports emerged that the US and Iran are negotiating a broad peace deal. This news has led to a strong selling pressure, with WTI falling 8% in one day and continuing to decline by another 5% the following day. The price has now settled below the critical $100 mark, with sellers pushing towards the $90 level.

Current Market Dynamics

The shift in market sentiment is notable, as prices had been rising due to geopolitical tensions. However, the narrative has changed, and traders are now focused on the potential reopening of the Strait of Hormuz, a vital shipping route for oil. The odds of a US-Iran peace deal by June 30 have increased to approximately 55%, which has contributed to the downward pressure on oil prices.

Technical Analysis

Price Action

WTI has formed a notable top, with a lower high pattern leading to a 19% decline since its peak on April 29. The price has broken below the $93 pivot zone, and maintaining this position is crucial for confirming further downside movement.

Resistance and Support Levels

• Resistance Levels:
  • $93 - $95 (Momentum Support)
  • $98 to $100 (Pivotal Resistance)
  • $104 (Next Mini Resistance)
  • $117 to $120 (Larger Channel Top)
• Support Levels:
  • $90 (Psychological Level)
  • $87 to $90 (Mini-Support)
  • $82 (Friday 17 Lows)
  • $78 to $80 (2025 Highs Key Support)

Short-Term Outlook

In the short term, the market appears oversold, which may lead to a temporary stall in the selloff. However, as long as prices remain below $94, bearish sentiment will dominate. A significant selloff could accelerate if trading volumes increase below the $90 mark. Conversely, a move back above $95 could indicate a potential range-bound or rallying scenario.