Crude oil is sharply recovering in an ongoing five-wave bullish impulse, with the rally reviving inflation concerns and pushing Asia-Pacific government bonds lower ahead of Wednesday’s US CPI report. Oil has held its gains as Trump’s new demands on Iran cloud the outlook for a deal to reopen the Strait of Hormuz, while markets now look to CPI for fresh signals on the Fed’s rate path.
From a technical perspective, crude oil appears to be in wave “iii”, suggesting further upside toward the open July gaps around $90 or even higher. However, traders should be aware of a potential wave “iv” pullback before the bullish continuation in wave “v”, even if impulse is part of an irregular wave B flat correction.
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