Oil prices rose as the Middle East conflict escalated, with Iran-backed Houthis joining the war and the US increasing its military presence. The situation is driving markets higher on fears of further supply disruption, especially as tensions grow around key routes like the Strait of Hormuz. Donald Trump added to the uncertainty by suggesting potential action against Iran’s oil infrastructure, raising the risk of retaliation. At the same time, Iran has restricted shipping through Hormuz, tightening global supply. The Houthis’ involvement creates additional risk to Red Sea shipping and alternative export routes, increasing volatility. Overall, the market is being driven by geopolitical headlines, with prices reacting sharply to any sign of escalation.
On the technical side, crude oil is finding sufficient resistance around the $100 mark for the time being, while Bollinger Bands have contracted somewhat, suggesting volatility is slowing. The moving averages are still validating an overall bullish trend, while the Stochastic oscillator is in extreme overbought territory. This could suggest a bearish correction in the upcoming sessions, given that there is no significant event to spike volatility and push the price higher. If there is a bearish correction, the first important area of support might be around $90, which is the psychological round number and the 50% monthly Fibonacci retracement level. On the contrary, if the price continues its bullish rally, the potential resistance area might be around $110, the multi-year high.
Disclaimer: The opinions in this article are personal to the writer and do not reflect those of Exness