Crude oil prices continue to trade near their highest levels in more than a month as geopolitical tensions in the Middle East remain the dominant force driving market sentiment. In its latest market analysis, Gammance brokers examine the technical and fundamental factors supporting WTI, highlighting the key resistance and support levels traders are closely monitoring as the commodity attempts to extend its recent recovery.

WTI Extends Its Recovery

West Texas Intermediate (WTI) opened the week on a positive note, climbing toward the $84.40 area after reaching its highest level since mid-June. The latest advance follows several weeks of steady recovery from the July lows and reflects growing concerns over global crude oil supplies.

Market sentiment has been heavily influenced by escalating tensions between the United States and Iran. The continued closure of the Strait of Hormuz has intensified fears over potential disruptions to one of the world’s most important energy shipping routes, supporting higher oil prices despite broader uncertainty across financial markets.

While geopolitical developments remain the primary catalyst, traders also continue monitoring global demand expectations and broader macroeconomic conditions that could influence energy consumption during the second half of the year.

Technical Breakout Strengthens Bullish Outlook

The technical picture has improved significantly during recent sessions.

WTI successfully broke above the 200-period Simple Moving Average on the four-hour chart last week, an important technical development that reinforced the recovery from July’s multi-month low. Price has also moved decisively above the 38.2% Fibonacci retracement of the broader May-July decline, strengthening the case for additional upside.

Momentum indicators continue supporting the bullish scenario. The Relative Strength Index (RSI) remains elevated near 76, reflecting strong buying pressure even as conditions approach overbought territory. Meanwhile, the MACD remains firmly in positive territory, suggesting that upward momentum continues to favor buyers.

Although momentum appears stretched in the short term, current technical conditions continue to support the broader recovery as long as key support levels remain intact.

Resistance Levels Come Into Focus

Attention now turns toward the next major resistance levels that could determine whether the current rally has additional room to extend.

The first significant objective sits near the 50% Fibonacci retracement at $85.84. A decisive break above this barrier would strengthen bullish momentum and potentially open the path toward the 61.8% retracement near $90.28, a level that could attract increased market attention if buying pressure continues.

Beyond that, higher Fibonacci projections around $96.59 and $104.64 represent longer-term upside targets should geopolitical tensions remain elevated and supply concerns persist.

Even if prices encounter temporary resistance, the overall technical structure currently favors buyers unless market sentiment changes materially.

Support Levels Remain Well Defined

Despite the recent strength, several important support areas continue to provide reference points for traders managing risk.

Initial support is located near the 38.2% Fibonacci retracement at $81.40, which now represents the first important level buyers will likely attempt to defend during any short-term pullback.

Below that, stronger support emerges around the 23.6% retracement at $75.91, followed by the 200-period Simple Moving Average near $76.97. A sustained move below these areas would weaken the current bullish structure and increase the possibility of a deeper corrective decline.

The broader recovery would only come under serious pressure if WTI eventually revisits the July cycle low near $67.04, which currently serves as the market’s major structural support.

Geopolitical Risks Continue Driving Sentiment

Unlike previous oil rallies driven primarily by economic demand, the current advance remains closely linked to geopolitical developments.

Ongoing tensions surrounding Iran and the Strait of Hormuz continue generating uncertainty over future crude exports and global energy supplies. Any escalation could quickly increase volatility across oil markets, while signs of easing tensions may encourage profit-taking after the recent advance.

At the same time, traders remain attentive to broader macroeconomic developments, including central bank policy expectations and global growth forecasts, both of which could influence future demand for crude oil.

Conclusion

WTI continues to trade within a constructive technical structure after breaking above key moving averages and important Fibonacci resistance levels. Strong momentum indicators, combined with persistent geopolitical uncertainty, continue supporting the bullish outlook despite increasingly overbought market conditions.

For now, attention remains focused on resistance near $85.84, with a successful breakout potentially opening the door toward $90.28. However, traders are also likely to keep a close watch on geopolitical headlines and global economic developments, as both remain capable of generating significant volatility in crude oil prices over the coming sessions.