What to expect if US-Iran meeting takes place?
What to expect if US-Iran meeting takes place?
Market reaction has been relatively mild to the change in the tone we have seen since Friday between the two sides. With the ceasefire deadline fast approaching, the oil market is holding steady, ready to potentially resume higher on any signs of a major re-escalation. For me, the real re-escalation line in the sand is around $100 on Brent.
It wouldn’t take much for crude oil prices —already supported by prolonged disruptions in the Middle East—to rally further. This is something to watch closely, as it could impact broader financial markets, as we saw in early March when equity markets and the euro sold off. Could we see a repeat of that? It’s becoming more plausible. The two sides appear to have drifted further apart since Friday, and there are now question marks over whether the planned meeting will take place on Wednesday, ahead of the ceasefire deadline.
No delegations sent to Pakistan yet
Iranian state media has reported today that no delegation has yet set off for Pakistan for the proposed peace talks. Tehran and Islamabad are not far from each other, taking about 3-4 hours for a direct flight. They can send their delegations in the minute, so the fact they haven’t gone there yet doesn’t necessarily rule out their eventual presence at the negotiating table. That’s how the markets see it for now, with oil steady and equity markets near recent highs. After all, we saw much the same in the run-up to the first round of talks in Islamabad.
For now, Iran’s stance remains that negotiations are pointless while it continues to face pressure from the US. The message, in essence, is this: lift the naval blockade, and then discussions can begin. Pakistan has already relayed that position to Donald Trump, so attention now turns to whether Washington is prepared to shift its approach to get talks moving.
One key detail to watch is the potential arrival of US Vice President JD Vance in Islamabad—if he turns up at all. Trump had suggested yesterday that he was already en route, though that proved premature. There are now indications he may arrive later today or overnight, which would at least point to talks going ahead.
Whether that leads to any substantive agreement is another matter entirely. At the very least, an extension of the ceasefire looks the most likely outcome. Unless Trump completely TACOs, there are one too many differences remain between the two sides. While that may keep risk sentiment somewhat firm, it also implies the Strait of Hormuz could remain closed for another week or two as the situation drags on. This would hardly be good news for investors looking for a quick drop in oil prices. It could also stall the equity market rally after the S&P 500 index hit new record highs following a powerful move higher.
Brent oil technical analysis and levels to watch
Oil prices have held steady around the $95 level as investors weigh direction from both the US and Iran. Since the weekend, both Iran and the US have been talking tough, and prices have remained relatively firm, maintaining much of the gap that was created over the weekend. This suggests there is an increased risk of re-escalation.
If oil prices start to rise a few more dollars, this could trigger fresh technical buying. That, in turn, could see prices break above the bearish trend line that has been in place since April 13.
A break above that trend line could then pave the way for oil to rise back toward the $100-per-barrel level. This is effectively the line in the sand now, given its importance as a psychologically significant level.
For now, support comes in around the $94–$95 area, where prices have held since the weekend. Although there was a brief dip below that level, it was short-lived. Therefore, the $94–$95 range remains key to watch. A decisive break below it would be a short-term bearish outcome, likely requiring meaningful de-escalation in geopolitical tensions to drive prices lower. If that area were to give way, prices could fall toward $90 and possibly retest last week’s lows of around $86 per barrel. These are the next key downside targets. However, given the sticky nature of prices at current levels, risks are once again tilting to the upside.
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e: Fawad.Razaqzada@TradingCandles.com
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