Crude Oil Price Update – Will Iran Decision Drive Market to $72.87 or $68.85?

June West Texas Intermediate crude oil futures are trading lower shortly before the cash market on Tuesday. After opening sharply lower, the market has traded in a tight range as investors await President Trump’s decision on whether the U.S. will leave the Iran nuclear deal.

The question remains whether the decision has already been baked into the price, which could turn this into a “buy the rumor, sell the fact” situation, or if there is still room to the upside due to aggressive speculative buying.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through $70.84 will signal a resumption of the uptrend. The main trend will change to down on a move through $66.85. Due to the prolonged move in terms of price and time, the market begins the session in the window of time for a potential closing price reversal top.

The nearest upside target is a long-term 50% level at $72.87.

On the downside, the first target is a 50% level at $68.85, followed by a potential support cluster at $68.37 to $68.22 and a Fibonacci level at $67.60.

Daily Swing Chart Technical Forecast

Based on the early price action, the direction of the crude oil market is likely to be determined by trader reaction to yesterday’s low at $69.51.

A sustained move over $69.51 will indicate the presence of buyers on this current dip in prices. If this generates enough upside momentum then look for buyers to make a run at yesterday’s high at $70.84.

Taking out and sustaining a move over $70.84 will indicate the buying is getting stronger. This could trigger an acceleration to the upside with $72.87 the next major upside target.

Taking out and sustaining a move through $69.51 will signal the presence of sellers. This will make $70.84 a new minor top.

If the selling pressure is strong enough, we could see a move into a series of retracement levels at $68.85, $68.37, $68.22 and $67.60. The latter is the trigger point for an acceleration into the main bottom at $66.85 and a major 50% level at $66.35.

Look for volatility at 1800 GMT when Trump announces his decision. Don’t be surprised by a two-sided trade because it is possible that Trump’s decision to leave the Iran nuclear deal has already been price in. Furthermore, Trump may announce he is delaying his decision. This would probably be bearish news.