WTI stalls at $112 again ahead of ‘power plant day’Us Crude Oil CFDFOREXCOM:USOILFOREXcomWe’ve now seen three consecutive failures above $112 in our WTI contract, making it the key reference point overhead for traders. It also makes for a handy level to build trades around on a day Donald Trump has labelled “power plant and bridge day”, referring to the 8pm EDT deadline he’s set for Iran to unconditionally reopen the Strait of Hormuz or risk a four-hour bombing spree he says could level the country. Based on the price action in other markets, such an escalation is deemed a low probability outcome, especially given Trump’s track record for abrupt de-escalation, particularly on Tuesdays. However, for what it may lack in perceived probability, such an outcome would likely pack a far greater punch, especially for energy markets given the risk of prolonged disruption, including potential damage to production facilities in the Gulf should Iran be able to retaliate. As such, if we get an escalation, the highs struck in the early stages of the war could be in play and then some. If we were to see such an outcome, longs could be considered above $112 with a tight stop beneath the level for protection, targeting the March 9 high of $118.98. If we see another TACO moment, the setup could be flipped. Shorts could be considered beneath $112 with a stop above the level for protection, targeting $105.85 initially and, beyond that, $95 and $92, all levels that have acted as support and resistance in what has otherwise been whippy, headline-driven price action lately. RSI (14) and MACD continue to favour buying dips from a purely technical perspective, but it must be acknowledged their signal is likely to be trumped by geopolitics on this occasion. Good luck! DS