Crude Oil has been falling steadily lately with analysts citing the peace deals in the Middle East. That looks like noise to me and the majority of the selloff might have been more about the combination of the de-escalation between Israel and Iran, and fears of the Fed opening the door for more tightening as that would be a headwind for demand on a forward looking basis.

Yesterday, the Fed decided to keep a neutral stance with strong pushbacks against a rate hike from Fed Chair Powell. Moreover, the US ISM Manufacturing PMI missed slightly with generally positive commentary, so the fears about some big slowdown should be set aside for the moment. This morning, we got a report saying that OPEC+ could extend the volunatry output cuts beyond Q2. Overall, the global growth impulse should continue as long as the data remains supportive and the central banks are not intentioned to hike anytime soon.

Crude Oil Technical Analysis – Daily Timeframe

On the daily chart, we can see that the price is now bouncing right around the key support zone in the $79-80 range and the long term trendline. This is where the buyers are stepping in with a defined risk below the trendline to position for a rally into the $90 region. The sellers, on the other hand, will want to see the price breaking lower to invalidate the bullish setup and start targeting the lows around the $68 level.

Crude Oil Technical Analysis – 1 hour Timeframe

On the 1 hour chart, we can see that we have another downward trendline defining the current downward momentum. Now, if the price breaks above it and continues past the $80.30 swing level, we can expect the buyers to gain more conviction and increase the bullish bets into new highs.

This article was written by Giuseppe Dellamotta at www.forexlive.com.