Oil rises as the US confirms a total blockade of the Strait, but peace hopes limit the upside
Oil prices have rebounded from a three-week low below $88 after the U.S. military confirmed a full blockade of the Strait of Hormuz, as investors weigh the prospects for a second round of U.S.-Iran peace talks.
President Trump said discussions between Iran and the U.S. could resume within days, suggesting the conflict may be approaching a turning point, even as U.S. naval forces continue to restrict Iranian oil exports.
The blockade has effectively halted maritime trade linked to Iran, increasing pressure on Tehran ahead of further negotiations. The conflict has already triggered a significant oil supply shock, lifting fuel costs and weighing on global demand, with the International Energy Agency warning of weaker consumption growth this year.
Despite the rebound, oil prices have still fallen nearly 8% over the past two sessions amid reports that Washington and Tehran remain in contact. Prices are likely to remain volatile and headline-driven, with any recovery in supply expected to be gradual due to logistical constraints.
Meanwhile, U.S. crude inventories rose by 6.1 million barrels last week, marking the eighth consecutive build, according to API data — a sign of softer demand or rising supply domestically.
Oil forecast – technical analysis
Oil has pulled away from the April high of 117.6, rebounding lower, breaking below the trendline support and the 200 SMA, but the support at 88.00 continues to hold.
Sellers supported by momentum will need to break below the 88.00 support to extend the move lower towards 80.00.
Any recovery would need to rise above the 200 SMA at 92.40 and the horizontal resistance at 95.00. Above here 97 comes into play, the rising trend line ahead of 100.00, the psychological level.
DAX is steady as investors await US-Iran developments
The DAX is little changed on Wednesday, reflecting a cautious tone across European markets as investors await further developments in the Middle East and monitor corporate earnings.
A second round of talks between Washington and Tehran could take place later this week, despite the ongoing U.S. naval blockade. However, while sentiment has improved, markets will need clearer evidence of de-escalation — particularly a reopening of the Strait of Hormuz — before a sustained recovery can take hold, especially in energy-dependent Europe.
The DAX has staged a recovery in recent sessions but continues to trade below its 200-day moving average, in contrast to U.S. equities, where the Nasdaq has recovered close to record highs.
Fundamentally, the outlook remains challenging. The IMF has downgraded Germany’s GDP growth forecast to 0.8% for 2026 and 1.2% for 2027 — the largest downgrade among eurozone economies — reflecting the impact of the conflict and rising energy costs, which have already pushed inflation up to 2.8% in March.
At the sector level, luxury stocks are under pressure in Europe as the conflict weighs on demand, while technology names are providing some support. Aixtron is 14% higher after raising its 2026 sales outlook, and ASML is also gaining 1% following stronger-than-expected earnings.
Looking ahead, the German economic calendar is quiet, with focus shifting to comments from Christine Lagarde and ECB policymaker Isabel Schnabel for further insight into the policy outlook. The market is pricing in 1, if not 2, rate hikes from the ECB this year.
DAX forecast – technical analysis
The DAX has extended its recovery from the 21,860, recovering above the falling trendline before running into resistance at the 200 SMA, keeping it below the multi-month rising trendline dating back to April last year.
Buyers, supported by momentum, will look to rise above the 200 SMA AT 24,140 and the rising trendline resistance at 24,400. A rise above there opens the door to 25,000, ahead of 25,500, and fresh record highs.
Sellers could be encouraged by the failure to retake the 200 SMA and the 50 SMA crossing below the 200 SMA in a death cross signal. Support is seen at 23,400, the weekly low and 23,000 below here.
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