Crude oil opened on Monday with a gap of 4 US dollars, and I believe many people couldn't find the opening candle on the chart at first glance... It's truly a nightmare for the bears, but in our previous analysis, we also believed that the probability of crude oil prices falling was high, but we didn't expect the drop to be so fast and fierce, catching many people off guard. However, if one had analyzed the weekend news in depth, it would have been highly likely to foresee this gap.
Crude oil closed higher last Friday, with WTI crude oil returning above the 70 US dollar mark, eventually rising by 1.88%, to 71.54 US dollars per barrel. It opened at 67.82 US dollars today and has been trading flat above 68 US dollars since then. It's hard to tell from the chart alone whether the next move will be up or down. Next, let's combine fundamental news to analyze the trend in depth, as a clear trend is the foundation of investment.
In recent times, the world has been focusing on the Middle East Peninsula, where the conflict between Israel and Iran has been closely watched. Since Iran's attack on Israel on October 1st, the gold market has risen by more than 100 US dollars. The anticipation of an escalation in the situation on the Middle East Peninsula is an important support behind this rise. However, Israel's attack on Iran last Saturday and the subsequent responses from both sides have dashed everyone's expectations, and the temperature of the Middle East situation has cooled down.
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The widely anticipated Israeli airstrike on Iran did not hit crucial oil facilities. The targets of the Israeli warplanes and missiles last Saturday were Iran's air defense bases and military infrastructure. The scale of this attack was relatively small, leading some experts to speculate that tensions will not escalate significantly. The statements from both sides after the event were also subtle. Israeli officials believe that the attack caused significant strategic damage but hope to allow Iran to continue treating it as "not worth responding to." Iran's Supreme Leader, Ayatollah Khamenei, stated on Sunday that the Israeli attack should not be exaggerated or underestimated, and did not call for new retaliation against Israel, indicating that Iran is cautiously considering how to respond. Iranian President Ebrahim Raisi said that Iran does not seek war but will defend its national rights and respond appropriately to Israeli aggression, and Iran also has the right to respond to Israeli attacks. The attacks that did not meet expectations and the cold handling by both sides combined make sense of the significant drop in gold prices after the opening on Monday.
It's really hard to find the opening candle for this week at first glance... Fortunately, the market has seen a moderate rise after the opening, and there has been no further downward exploration. Currently, it is in a horizontal trend, maintaining above 68 US dollars. As for whether the market will rise or fall next, it is expected to continue to be flat near 68 US dollars in the short term. In the long term, it depends on the actual actions of Iran and Israel, and the demand side is also something to pay attention to.
At present, there is still no good entry point in the crude oil market. The direction of demand and news is contradictory, and there is a lot of geopolitical uncertainty. It is recommended not to take risks and enter the market recently. It is better to wait and watch, while looking for opportunities in other markets.
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