Crude oil began the trading week with a significant negative gap after President Donald Trump announced he had called off planned military strikes on Iran. Trump stated that both sides had reached the framework of an agreement that would include the immediate and complete reopening of the Strait of Hormuz, a narrow shipping chokepoint through which roughly one-fifth of global daily oil consumption transits. He noted that any ceasefire remains contingent on finalizing a deal quickly.

The development appears consistent with Trump's repeated "escalate to de-escalate" approach, which has historically placed a ceiling on oil price rallies. However, Iran publicly rejected Trump's claims, asserting that the Strait of Hormuz remains closed. This contradiction between the two sides has left market participants navigating conflicting signals, with neither a confirmed ceasefire nor confirmed escalation to anchor positioning.

In the absence of further de-escalation and confirmed progress in negotiations, oil prices are expected to drift higher, with upward pressure potentially accelerating toward the weekend amid the risk of surprise US military action. The pattern reflects a common market behavior in which traders build a geopolitical risk premium into prices ahead of weekends, when closed markets cannot immediately respond to breaking developments.

Daily Timeframe Technical Analysis

On the daily chart, crude oil retraced once again toward a support zone around the 78.00 level. Buyers entered the market with defined risk below that support, positioning for a potential rally to new highs. Conversely, sellers would need a decisive break below the support zone to open the path toward the next significant support at 68.00.

4-Hour Timeframe Technical Analysis

On the 4-hour chart, price action suggests possible consolidation between the 78.00 support and the 87.00 resistance. Market participants are likely to continue trading within this range — buying near support and selling near resistance — until a breakout occurs in either direction.

1-Hour Timeframe Technical Analysis

On the 1-hour chart, price movement is expected to remain rangebound pending the next substantive US-Iran development. The average daily range for the session is marked by the red lines on the chart.

Upcoming Economic Catalysts

These labor-market and services-sector readings can influence the US dollar and broader growth expectations, both of which feed into crude oil demand sentiment given oil's dollar-denominated pricing.

• Today: US Job Openings data (JOLTS)
• Tomorrow: US ADP Employment Change and ISM Services PMI
• Thursday: US Initial Jobless Claims
• Friday: US Non-Farm Payrolls (NFP) report

Ongoing US-Iran developments will remain the primary focus for crude oil markets throughout the week.

Source: Investinglive