Crude oil and natural gas prices are rallying amid rising geopolitical tensions and a weaker US Dollar. As investors brace for potential supply shocks, the energy markets are showing renewed bullish momentum.
🌍 Geopolitical Tensions Push Oil Higher
WTI crude oil prices have jumped significantly, recently breaking above the key $77 mark after news of Israel’s strike on Iran rattled global markets. The rally comes amid concerns that ongoing conflict in the Middle East—especially near Iran’s uranium enrichment sites—could escalate into a broader regional crisis.
Adding to the pressure, Iranian military officials hinted at the possibility of closing the Strait of Hormuz, a critical chokepoint through which nearly 20% of the world’s oil supply passes. Any disruption here could cause an oil price spike and fuel global inflation fears.
However, diplomatic developments have cooled market nerves slightly. President Trump’s announcement that Iran may be open to negotiations has softened the outlook for an extended conflict—though the risk premium in oil remains high.
đź“… Meanwhile, traders await the release of U.S. Retail Sales data, expected to impact the US dollar and energy markets in the short term.
📉 Weakening Dollar Adds Fuel to the Rally
The US Dollar Index (DXY) has come under increasing pressure, falling below the 100.65 support level and showing signs of a broader downtrend. This decline is enhancing commodity demand, especially for dollar-denominated assets like crude oil and natural gas.
Technical patterns suggest the dollar is forming a head-and-shoulders reversal, with further downside likely unless DXY reclaims the 100.65 pivot. If the weakness persists, it could support continued upside in energy prices.
🔍 Technical Analysis
🛢️ WTI Crude Oil
Daily Chart Outlook:
- Price has successfully broken above the 200-day SMA, confirming a bullish bias.
- Resistance now stands at $77.50, with upside potential toward $84.
- The double bottom formation around $55 has fueled recent bullish momentum.
4-Hour Chart Insight:
- A breakout from a descending broadening wedge is driving gains.
- Support has held around $68, and bulls are targeting a climb above $75.
🔋 Natural Gas (NG)
Daily Chart Outlook:
- Forming a bullish ascending channel after a cup-and-handle breakout.
- As long as price stays above $3.00, a move toward $5.00 is possible.
- RSI confirms improving momentum, bouncing from the neutral zone.
4-Hour Chart Insight:
- Price is consolidating above the key $3.00 level.
- A breakout above $3.80 could pave the way toward $4.70.
- A drop below $3.00 might invalidate the bullish setup, with potential downside to $2.30.
đź’µ US Dollar Index (DXY)
Daily Chart Outlook:
- Trading below the 50-day SMA and forming a bearish head-and-shoulders pattern.
- Below 100.65, pressure mounts for a drop toward the 95 area.
4-Hour Chart Insight:
- Price remains inside a descending channel, currently rebounding off 98.00.
- Failing to break above 100.65 could result in further losses.
đź“Ś Key Takeaways for DailyForex.pk Readers
- Crude oil and natural gas are gaining strength amid global political tensions and supply concerns.
- A weaker US Dollar is enhancing the bullish case for commodities.
- Technical charts signal more upside for both oil and gas, unless geopolitical calm returns quickly or the US dollar stages a major recovery.
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