Crude oil opens the week lower and extends the losses as US-Iran deal hopes return. What's next?

Crude oil opened the week lower and extended the losses as optimism around a US-Iran deal to reopen the Strait of Hormuz strengthened. In fact, Iran has proposed a two-day framework to reopen the Strait of Hormuz in exchange for US concessions, including sanctions relief, the release of frozen assets and changes to the US military presence. This is a shorter timeline that the seven-day framework proposed a month ago. The markets interpreted the shortened timeline as a positive development, although the US has not accepted the proposal yet and negotiations continue. Meanwhile, the conflict between Saudi Arabia and the Houthis continues to escalate, while Russia and Ukraine extended the reciprocal attacks on energy infrastructure.US-Iran negotiations are of course the most important thing for markets, so a breakthrough will likely lead to a significant selloff, while setbacks should keep oil prices supported. A de-escalation in the Saudi-Houthi conflict could also trigger a correction, although the downside would be limited by US-Iran stalemate.  CRUDE OIL TECHNICAL ANALYSIS – DAILY TIMEFRAMEOn the daily chart, we can see that crude oil(CFD contract) opened the weekly lower today and extended the losses as hopes for a US-Iran deal strengthened. If we get a pullback into the lower bound of the channel, we can expect the buyers to step in, with a defined risk below the channel, to position for a rally into the 110.00 resistance. The sellers, on the other hand, will want to see the price breaking lower to increase the bearish bets into the 68.00 support next.CRUDE OIL TECHNICAL ANALYSIS – 4 HOUR TIMEFRAMEOn the 4 hour chart, we can see the price broke below the upward trendline and it’s now testing a key support around the 99.50 level. We can expect the buyers to step in around the support, with a defined risk below it, to position for a rally into the 110.00 resistance. The sellers, on the other hand, will want to see the price breaking lower to increase the bearish bets into the lower bound of the channel.CRUDE OIL TECHNICAL ANALYSIS – 1 HOUR TIMEFRAMEOn the 1 hour chart, there’s not much we can add here as the buyers will have a better risk to reward setup around the support, while the sellers will need a break to extend the pullback into new lows. The red lines define the average daily range for today. UPCOMING CATALYSTSTodaywe have the US ISM Manufacturing PMI. Tomorrow, we have the US Job Openings data and the US midterm elections. On Wednesday, we have the US ADP and the US ISM Services PMI. On Thursday, we get the latest US Jobless Claims data. On Friday, we conclude the week with the US NFP report and the University of Michigan Consumer sentiment survey. This article was written by Giuseppe Dellamotta at investinglive.com.