Crude Oil has been ranging between the $83 support and the broken trendline as the situation in the Middle East remains a big risk for the market. Good news were followed by falling oil prices while bad news triggered rallies. Yesterday, we got an unfortunate news of a hospital getting bombed and causing hundreds of casualties.

As Bloomberg reported, Oil prices climbed as Middle East leaders cancelled a summit between US, Jordan, Palestine and Egypt in Amman. It’s not yet clear who’s responsible for the bombing as Israel blames a failed rocket launch by the Palestinian Islamic Jihad group and Hamas blames the Israeli airstrikes. Once we get more accurate information, we will likely see Oil prices climbing if Israel is found out responsible. On the other hand, if the Islamic Jihad group is found out responsible, Crude Oil could fall.

WTI Crude Oil Technical Analysis – Daily Timeframe

On the daily chart, we can see that Crude Oil printed a double bottom on the $83 support as tensions in the Middle East remain high. The price is now at a key resistance where we have the confluence of the 50% Fibonacci retracement level, the red 21 moving average and the broken trendline. This is where the sellers continue to pile in to position for a drop back into the support and ultimately eyeing a break lower.

WTI Crude Oil Technical Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that the price is now trading withing a rising channel which could end up being a bear flag pattern if the price was to break to the downside. The buyers will need the price to break above the resistance around the $88 level to invalidate the bearish setup and start targeting the highs.

WTI Crude Oil Technical Analysis – 1 hour Timeframe

On the 1 hour chart, we can see more closely the near term price action and the key resistance around the $88 level. If we start to see the price falling from these levels and break through the last swing low at $85.60, we can expect the selling momentum to increase and likely lead to a selloff into the $83 support. That’s where the buyers will have another good opportunity to position for a rally with a better risk to reward setup.

Upcoming Events

Tomorrow we will get the latest US Jobless Claims report and the market will want to see if the miss in Continuing Claims last week was just a blip or the start of a trend. Later in the day we will also hear from Fed Chair Powell where the market will be focused on any hint about the near-term policy outlook. Crude Oil is likely to get under pressure if the Jobless Claims data misses expectations by a big margin or Fed Chair Powell sounds very hawkish. Other risks include the situation in the Middle East where bad news around an expansion of the conflict could lead to a spike in Crude Oil prices.