Crude Oil goes vertical on fresh explosions in southern Iran

Crude Oil climbed sharply on Tuesday after American forces launched strikes against targets belonging to the Islamic Revolutionary Guard Corps in southern Iran. The West Texas Intermediate (WTI) crude price broke above $87.50, reaching a session high near $89.00 before pulling back to just above $88.00. Brent crude followed the same trend, climbing to near $93.50. The strikes were in response to recent attacks on commercial shipping in the Strait of Hormuz and American personnel in the region.

The U.S. Central Command confirmed the strikes, which targeted several locations in Iran, including Bandar Abbas, Minab, Qeshm, Sirik, Jask, Konarak, and Chabahar. These locations include Iran's terminal on the Gulf of Oman and the only Iranian ocean port outside the Persian Gulf, which is a workaround to the naval blockade since April. The strikes aimed to disrupt Iran's ability to export oil without passing through the Strait of Hormuz, which has been under naval blockade since April.

The market reacted positively to the strikes, with WTI oil gaining nearly a dollar and a quarter in three consecutive five-minute bars. However, the move was short-lived, as the price has since given back more than half a dollar to trade above $88.00. The session high of just under $89.00 caps the move, with the next real mark on the chart being the late-July spike near $92.00 for Brent crude. The resistance level is the round number above $92.00, while the support level is just above $85.00.

Traders are watching the retest of the August ceiling just short of $87.50, which a genuine breakout would need to defend. The 50-day Exponential Moving Average (EMA) near $82.00 also supports the bullish bias while the price holds above $87.50. The Stochastic Relative Strength Index (Stoch RSI) near 95 is rolling over from the spike, indicating that the retest of the price level is the next step. A daily close beneath $87.00 would invalidate the bullish bias.