Just weeks ago, traders were pricing in peace. Now they're pricing in war again—and that reversal says everything about how fragile the current Middle East calm really is.

Brent crude has surged to $86 a barrel, its highest level in a month, after the Washington-Tehran ceasefire effectively collapsed. US strikes hit Iranian defence infrastructure, Iranian missiles struck Emirati tankers, and Washington reinstated its naval blockade of Iranian ports.

Additionally, yesterday's June CPI year-on-year print eased bullish pressure on the dollar and gave a lift to dollar-denominated assets. Headline inflation fell to 3.5% year-on-year, well below the expected 3.8%, largely thanks to a sharp drop in energy prices during June. However, the read looks backward-looking rather than structural: it reflects June's energy weakness, before the ceasefire unraveled.

Technical Analysis of Brent Crude Oil

As the chart shows, Brent entered a clear downtrend after being repeatedly rejected from the psychological $110 zone in May, marked by lower highs and lower lows and a descending trendline respected for nearly two months.

Bullish Scenario

After bottoming near $70 in early July, Brent shifted character, printing higher highs and higher lows due to renewed Middle East tensions. This was confirmed by a break and retest of the descending trendline, followed by a reclaim and retest of the 200-period EMA. With two ascending trendlines now supporting the move, price sits at a key juncture: the $85 zone, a former support turned resistance. A confirmed break here would open the path back toward the $90-$92 zone.

Bearish Scenario

Alternatively, Brent could reject $85 once again, pulling the price back into the $70–$80 range that has defined the past month. Confirmation would come from a break below both the short-term trendline and the 200-period EMA, signaling that buyers have lost control and exposing the range lows.

Brent Crude now sits at a genuine crossroads, caught between an unresolved geopolitical crisis and a technical structure hinting at renewed strength. Whether this bounce marks a real turning point or just another head-fake within a volatile range will likely hinge on who blinks first—Washington and Tehran, or buyers and sellers at $85. Either way, the next move could set the tone for the entire energy market this summer.

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