According to the XTI/USD chart, WTI crude moved beyond the 4 February high yesterday, setting a fresh monthly peak. The advance has been largely fuelled by rising geopolitical tensions.
Media coverage highlights several contributing factors:
→ The meeting between Donald Trump and Benjamin Netanyahu in Washington on 10–11 February did not produce a breakthrough. Although Oman has acted as a mediator and officials spoke of being “close to a compromise”, no formal agreement has been finalised.
→ Reports suggesting that additional US aircraft carrier groups could be dispatched to the Middle East have heightened market anxiety. Any deterioration in the situation could disrupt flows through the Strait of Hormuz, a route responsible for roughly one-fifth of global oil consumption.
Despite this supportive fundamental backdrop, the technical picture indicates that the market may be vulnerable to a corrective move.
Technical Outlook for XTI/USD
In our analysis on 5 February, we:
→ mapped out a broad upward channel (highlighted in purple), observing that its lower boundary had consistently acted as support;
→ identified the $65 area as a likely hurdle for buyers seeking to sustain the rally.
Recent developments reinforce this assessment:
→ yesterday’s push above the 4 February high may be interpreted as a failed breakout, potentially signalling a bull trap;
→ a bearish engulfing formation has appeared on the chart (see arrow), suggesting fading upward momentum.
It is also worth noting that several major investment banks consider current WTI valuations elevated, projecting a decline towards $57–59 on expectations of excess supply. However, for such a downturn to unfold, geopolitical risks would likely need to ease.
Given the above, momentum may now be shifting in favour of sellers. A move towards the lower boundary of the ascending channel cannot be ruled out. In the near term, the $64.40 level — previously resistance last week — may act as initial support.
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