Crude oil prices are drawing renewed attention as geopolitical tensions between the United States and Iran intensify. Escalating rhetoric and military posturing in the Middle East have raised fresh concerns about potential supply disruptions, adding a clear risk premium to energy markets. With traders closely monitoring developments around US involvement and regional stability, volatility in oil has increased noticeably. This geopolitical backdrop is providing fundamental support to the current recovery, reinforcing the bullish technical structure that has been developing since the breakout earlier this year.
From technical perspective, crude is in recovery mode since we confirmed the breakout of the downward channel at the beginning of the year. So far we can see a strong push to the upside, ideally we are in wave C, which could be part of either a triangle or a flat. At the moment, a flat appears more probable because of the sharp recovery. In that case, the market could resume higher toward 78 or even 80, back to the previous wave A swing high, which is an important resistance area where flats often end. If the market turns straight down at the beginning of the week and tries to fill the gap around 67, then our primary view would shift more toward a triangle.
However, when looking at the 4 hour chart, it appears that we may still be only in wave three of an impulsive wave C, meaning the five wave pattern from 61.84 is incomplete. So be aware of further strength in energy markets in the very short-term.
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