Oil: The Key Geopolitical Technical ZonesWTI CRUDE OILTVC:USOILSwissquoteWhat will the Fed's monetary policy be after the summer? Will the current status quo continue ahead of the U.S. midterm elections? A large part of the answer to these questions will depend on the outlook for U.S. inflation. The Fed primarily focuses on core inflation, which excludes oil prices. However, if headline inflation (which includes oil and energy prices) remains too high for too long, it can eventually have a broader impact on inflation dynamics. In the United States, there is a strong positive correlation between the price of a barrel of U.S. crude oil and the price of gasoline at the pump (one U.S. gallon = 3.78541 liters). Therefore, persistently high oil prices over several weeks can ultimately influence the overall outlook for headline inflation. The Fed needs oil prices to remain under control in order to maintain its current monetary policy stance. Technical analysis makes it possible to identify key price zones for crude oil whose trends have been closely linked this year to geopolitical developments and supply constraints. The Strait of Hormuz and the Bab el-Mandeb Strait are the key drivers of the oil price trend this year. Below, I will outline the main technical price zones for U.S. crude oil. Then it's up to you to monitor real-time oil prices on TradingView (USOIL) to assess where we currently stand regarding inflation risks linked to oil prices. The chart below displays the weekly Japanese candlestick chart of U.S. crude oil (WTI), together with the main technical price zones according to their potential impact on U.S. inflation. •Zone 1: Below the bullish gap of Monday, March 2 (below $67) → Disinflation, return to the environment that prevailed before the military operations of February 28. Geopolitical stabilization. •Zone 2: Between the bullish gap ($69) and $80 → Neutral impact on inflation. •Zone 3: Between $80 and $87.6 → Technical red alert. •Zone 4: Between $87 and $100 → Strong upward pressure on headline inflation. •Zone 5: Above $100 → Inflation shock. So, which zone are we in today? DISCLAIMER: This content is intended for individuals who are familiar with financial markets and instruments and is for information purposes only. The presented idea (including market commentary, market data and observations) is not a work product of any research department of Swissquote or its affiliates. This material is intended to highlight market action and does not constitute investment, legal or tax advice. If you are a retail investor or lack experience in trading complex financial products, it is advisable to seek professional advice from licensed advisor before making any financial decisions. 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