Forex● Neutral
Brent Crude Sinks to $70 as Hormuz Risk Premium Vanishes
The US-Iran ceasefire stripped the risk premium from Brent crude, sending prices below $70. RSI at 28 signals oversold but no capitulation; the technical breakdown targets $62.
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The US-Iran ceasefire announced June 14 has eviscerated the geopolitical risk premium that propped up Brent crude through the first half of the year. Traders are now pricing in a return of normal shipments through the Strait of Hormuz, a shift that accelerated after a technical breakdown on May 25 when the medium-term uptrend shattered on a downside gap. That breakdown followed an earlier breach of $80 support, covered in our prior analysis.
Brent has since sliced through the lower boundary of the market profile, with the next major floor at $70 a barrel. The chart shows resistance now sits near $95, with a thicker supply zone between $103 and $104 – the old point-of-control area. A recovery above $113 would bring the $120.50 level into play, though such a move would require a full reversal of the supply expectations triggered by the ceasefire.