Crude oil had a pretty sharp drop on Wednesday after Trump said the US was in talks with Iran, but it is still not really clear whether this is confirmed or just something that temporarily pressured the market.
Looking at the price action, seems like market is trying to ignore what Trumps posts, espeicalyl since that Monday moves. We still think that a higher degree correction will continue, as we have five waves down from the 120 spike. In our view, we are now in the middle of a higher degree A-B-C decline, therefore, this weakness should resume AFTER wave B is completed, but for now we are still in a intraday corrective recovery phase. So we think that much more important resistance is seen around 104 to 107, and possibly even up to 110, which also aligns with the 78.6% Fibonacci level. That zone could act as an area from where weakness resumes, meaning After another short term push higher as presented on the 4h chart.
However, if price continues to move sideways instead of pushing higher, then a triangle could still develop as an alternate scenario. Still, that is not the primary view, as the rebound from the March 10 low looks like an impulsive wave A so zigzag fits better to this structure.
Overall, we think crude oil may stay neutral in the near term, but could later turn lower in for wave E, with a potential target area on the daily chart between 66 and 70 per barrel.
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