As shown on the XBR/USD chart, the price of Brent crude oil has pulled back from yesterday’s 4.5-month high following a statement from the White House that President Donald Trump will make a decision within the next two weeks on whether the United States will take part in the Israel-Iran conflict.
According to Reuters, the US President is facing backlash from some members of his team over the prospect of launching a strike against Iran, which could drag the US into yet another prolonged war.
Technical Analysis of the XBR/USD Chart
From a technical standpoint, Brent crude oil price is developing within an upward channel (marked in blue), though several bearish signals are appearing on the chart:
→ a bearish gap that formed overnight;
→ a false bullish breakout (indicated by an arrow) above the $76.50 level, drawn from the 13 June high;
→ bearish divergence on the RSI indicator;
→ a break of the recent local ascending trendline (marked in orange).
Given the steep angle of the rising blue channel, it is reasonable to assume that bears may attempt to break through its lower boundary, which is currently acting as support. Whether this scenario materialises in the oil market will largely depend on developments in the Middle East.
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