Oil retreats after a gap up as US Intervention sends markets into motion

[Redator]

Oil prices have been trading erratically in recent weeks, following the onset of the Israel-Iran conflict which initially sent prices soaring from $64 to $76 in under a week.

After consolidating near those highs, crude broke above the initial war-driven spike late last week—only to surpass that level again during an overnight gap-up to $78.43 as the US Army attacked Iranian nuclear facilities. However, the breakout was met with some selling, leading to a sharp intraday reversal.

One trigger for this volatility came from Iran’s threat to disrupt shipping through the Strait of Hormuz, a critical chokepoint responsible for roughly 20% of global oil flow.

While the announcement stirred short-term supply concerns, market participants remain skeptical about Iran’s ability to follow through as some parts of the Strait are in Oman waters prompting a pullback. – An invasion from Iranian forces would create more conflicts for an already well-occupied IRGC army.

Despite the retracement, price action remains far from bearish. Crude continues to consolidate in the upper end of its recent range, indicating sustained underlying strength amid ongoing geopolitical tension.

A fresh report from Iranian media channels signalled that the retort from Iran against US Forces is only hours away.

Read More: EUR/USD wavers around 1.15 as US enters the Israel-Iran Conflict

US Oil Intra-day Technical Analysis

US Oil 4H Chart

US Oil 4H Chart, June 23, 2025 – Source: TradingView

Our past week analysis mentioned a potential resistance around $79 which served as a magnet for the price gap, right before prices retreated in a gap-fill.

Prices are consolidating right below the $75 to $76 Main Resistance as the current 4H Candle is forming a long-tailed Doji, indicating indecise markets – The 4H MA 20 is just above current prices.

More headlines are appearing by the hour, as the US is currently still interested in diplomatic solutions after their attack.

The 4H RSI is back to the neutral zones, retracting from overbought levels, leaving some space for a potential consequential move.

Let's take a closer look.

US Oil 1H Chart

Momentum is entering the selling region with prices shy of the $75 key level and just below the War-Upwards trendline.

Hourly 20 and 50 Moving Averages are acting as immediate resistance, however do not forget that amid greater volatility, Support and Resistance levels are more subject to breaks.

In the meantime, Oil bulls would look to break above the two key MAs to retest the overnight highs – Prices would first need to push above the 76$ highs from the Resistance Zone.

In a bearish continuation, sellers would look at the $72 zone, that acted as support in the post-spike price retraction. The support zone is in confluence with the confluence with the 1H MA 200 that caught up to the swift rise in prices.

No scenario is more appealing than the other as uncertainty is still very high and prices are consolidating. In such cases, look for confirmation of your biases and breakouts beyond consolidation points.

Safe Trades!

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