As anticipated in the opening, we can consider a bullish bias only after a clear pullback and continuation of zone $67. In this case we will see $68.40 first and $69.30 then.
Momentum and Positioning: Neutral Readings, Fading Bullish Fuel
The momentum does not signal a takeoff. It is more subtle.
On the indicators panel, the ECRO is in phase of release after having passed all the Asian session and part of the European one dancing between the opening price and the Weekly Pivot at 65.19.
The Stochastic tells us of a nice bullish divergence that has anticipated the movement of the break of the latest highs.
Let us not forget that the rallies could struggle to become persistent without a net change of the geopolitical news.
Positioning and Risk
In my view, the short setup is neutral until the price does not confirm the break of 67.20.
Bullish scenario: To take back the control, the buyers must conquer 67.20 with clear follow-through. In that case the path toward the upper resistance band and potentially the area 70 reopens. The most probable catalyst would be a real shock as we were saying before, the only true “fuel” (it is the case to say it) to support a movement of this kind.
Bearish scenario: A net break below 63.90 without rapid recovery would suggest a transition into corrective phase, with 63.00 / 63.20 as next key area. The main driver would be a further easing of the international tensions.
The key risk of this reading remains a possible geopolitical escalation, which can change rapidly the picture.
Conclusion
Oil, after repeated failures near $67.20, has lifted the head. Whether it is a false movement or not will be told by the technical analysis and above all by the geopolitics of these days.
The context of the supply does not signal a real scarcity, which helps to explain why the market struggles to sustain the bullish momentum despite the background noise.
The base scenario remains range, except the long/short breakouts of which we have spoken. Until a real shock will emerge it is probable that oil will remain trapped in this regime.
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