Brent falls as US-Iran peace talks progress. These are the key levels to watch

Brent has unwound a significant portion of its war premium this week. Reports that the US has sent Iran a one-page memorandum of understanding through Pakistani intermediaries, aimed at formally ending the conflict and gradually reopening the Strait of Hormuz, have shifted the tone in the oil market dramatically. President Trump has paused “Project Freedom,” the naval effort to escort vessels through the strait, citing progress in talks, while cautioning that a deal has not yet been finalised and warning of more intense strikes if Iran fails to comply.

The reaction in the oil market has been swift. Brent has dropped from the highs above $110 earlier in the week to trading back near $100, briefly trading into the 92 to 95 range lows before recovering. This unwinds a meaningful portion of the rally we covered in our last oil article, when Brent was trading near multi-year highs on the back of Trump’s rejection of Iran’s Hormuz proposal and the UAE’s exit from OPEC.

Adding to the catalyst stack, April Non-Farm Payrolls are released later today at 12:30 UTC, with consensus expectations clustered around the 60K to 75K range, well below March’s 178K print. The dollar has already softened ahead of the release, with DXY trading near 98, the lowest level since early March, and the move could potentially extend further depending on the print.

Key takeaways

• Brent has dropped from above $110 earlier in the week to trading back near $100 as the US-Iran peace MOU gathered pace
• The 92 to 95 support zone held on the first test, and price has recovered back toward the range EQ near $102
• The 4-hour range between 94.50 and 102 is the immediate playing field for intraday traders
• A clean break of either boundary could potentially set the next directional move toward the daily levels
• NFP today at 12:30 UTC is the next major catalyst, alongside any further developments on the Iran deal

Daily chart

Brent has now broken below the range EQ around $102 and is currently trading back near $100 after dipping to test the 92 to 95 range lows earlier in the week. After the break of range EQ, the 92 to 95 support zone that marks the range lows came in and held over the past two sessions, but downside momentum remains relatively strong.

Price action remains volatile and choppy. Oil is being directly affected by the situation in the Middle East, and any developments around the rate of war or de-escalation continue to feed into the supply and demand story.

• If the current selling pressure continues, the next logical area of support could be the 92 to 95 zone below
• If the situation in the Middle East deescalates more, the 85 support could potentially come into play in the not-too-distant future
• A reclaim of the $102 range EQ could potentially shift the structure back toward the upper part of the recent range

4-hour chart

On the 4-hour, Brent is trading in a clearly defined range with 102 as the upper boundary and the 94.50 area as the lower boundary. Intraday traders could potentially have their activity confined within these levels, while swing traders could potentially be looking for a clean break above or below for the next directional move.

• A break above $102 could potentially open the path back toward the upper part of the daily range
• A break below $94.50 could potentially put the 92 to 95 daily support zone in play, with the 85 level as the next major area below
• The daily levels effectively become the targets depending on which side of the 4-hour range gives way first

What to watch

• $102 range EQ as the immediate upside pivot. A reclaim could potentially shift the structure back to the upside
• 94.50 as the immediate downside pivot on the 4-hour. A break could potentially open the door to the wider daily support zone
• 92 to 95 support zone as the major daily support. Holding this area could potentially keep price contained within the broader range
• 85 support as the next major level below if the daily range lows give way
• NFP today at 12:30 UTC, with consensus around 60K to 75K. A weak print could potentially extend the dollar weakness already in train, while a stronger print could potentially do the opposite
• US-Iran negotiations, with any progress or breakdown likely to feed back into oil directly

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