Crude oil received a boost following the pause in reciprocal tariffs, which eased growth concerns and raised hopes for more de-escalation. This sentiment comes after a sharp downturn triggered by disappointing tariff announcements on April 2 and an unexpected production increase by OPEC+.
The recent pause helped mark a short-term market bottom, providing some support amid positive expectations. Continued favourable news could support this market, whereas further negative developments might exert downward pressure.
Technical Analysis Signals
On the hourly chart, an upward spike is visible after the tariff pause, with a pullback from critical resistance in the 62-64 range. The price is now retesting this resistance level, and an inverted head and shoulders pattern has emerged, with its neckline positioned around this resistance.
Sellers are expected to enter around the resistance, managing risks with the prospect of a new low. Buyers, conversely, aim to see a price break above the resistance, potentially pushing the market towards the 72.00 mark.
What we’ve seen here is a textbook response to changing geopolitical developments—supply-side optimism meets macroeconomic uncertainty. Crude oil found relief as tit-for-tat trade actions halted, softening expectations of economic drag and triggering a rebound from recent losses. What had been a rather abrupt bearish move, initially propelled by new tariffs and uneasy shifts in production policy, seems to have been temporarily absorbed by the market.
Market Sentiment and Strategies
The pause, serving as a pivotal shift in sentiment, effectively established a near-term price floor. Market participants briefly breathed easier, choosing to recalibrate their positions not out of enthusiasm, but from the removal of immediate downside threats. The price responded accordingly—staging a short-term recovery as buying interest returned. Support grew not necessarily from improved fundamentals, but from lowered anxiety.
From a technical point of view, things have become more defined. On the intraday timeframes, price action recovered in a steep move before rolling over as it reached familiar resistance levels in the mid-60s. The retest of this range—now serving as a deciding point—has taken added weight with the development of an inverted head and shoulders pattern. The neckline of that pattern aligns with resistance, forming a double layer of confluence that’s hard to ignore.
We’re watching two competing strategies play out. Those favouring downside are likely to reinitiate short positions around this range, possibly drawing confidence from the symmetry of the pattern and the historical resistance overhead. They anticipate any failed breakout could swiftly unravel the bounce, revisiting the levels from early April. With the sharp decline still fairly fresh, the expectation of downward continuation still holds technical merit, especially if sentiment turns less constructive.
On the other end, buyers are shaping around a clean breakout strategy. For them, a confirmed move through the neckline could signal a reversal with momentum. If that happens, they may target the higher zone near 72.00, which stands as a psychological and previously contested area. A break of this kind tends to feed on itself—particularly if volume aligns with the move and broader risk sentiment continues to lean supportive.
From our side, it’s about balancing size and exposure ahead of potentially fast-moving conditions. Reactions to economic rhetoric or output statements are increasingly sharp and less predictable. Marking trades near the upper edge of a pattern like this makes risk placement less forgiving. We should be cautious of overcommitting ahead of confirmation.
Right now, timing remains delicate. Sustained direction depends less on a single technical level and more on how participants interpret upcoming signals—particularly surrounding industrial demand and supply chain continuity. Should further positive headlines surface, especially around trade or production coordination, those previously sceptical may capitulate, fuelling a stronger up-move. But any hint of renewed friction or unscheduled increases in supply could swing intraday flows back the other way.
For those of us engaged in short-term derivatives, consistency in execution and readiness to switch posture remain key. Technical patterns like these offer structure, but they aren’t infallible—we must treat them as tools, not forecasts.
