Oil Trade Setup – April 28
Market Overview:
Oil prices are under pressure early this week as traders balance rising geopolitical risks, looming OPEC+ supply increases, and persistent global economic uncertainty. West Texas Intermediate (WTI) crude for June delivery is hovering near $62.94 per barrel after slipping slightly in early trading.
Sentiment remains cautious:
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OPEC+ is preparing to release an additional 2.2 million barrels per day starting June, weighing on prices.
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U.S.-China trade tensions are worsening, denting growth and demand outlooks, even as hopes for a resolution occasionally offer support.
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Recent data also shows China’s crude imports surging, but questions remain about the sustainability of demand.
Technically, WTI crude is trading near key support levels, with the 50-EMA at $62.83 and the 200-EMA overhead at $63.31. A bearish trend line continues to cap advances, while RSI indicators are starting to turn lower from overbought territory.
Oil Trade Setup
| Parameter | Details |
|---|---|
| Asset | WTI Crude Oil (June Contract) |
| Trade Direction | Sell (Short) |
| Entry Zone | $63.00 – $63.31 |
| Stop Loss | Above $64.00 |
| Take Profit 1 | $62.00 |
| Take Profit 2 | $61.50 |
| Risk/Reward Ratio | Minimum 2:1 |
| Rationale | Oil prices remain under pressure due to looming OPEC+ production hikes, ongoing U.S.-China trade tensions, bearish technical structure with price trading below key moving averages, and a weakening RSI signal. Price action is near resistance levels ($63.00–$63.31), providing an attractive area to initiate short positions with controlled risk. |
| Key Risk Events | OPEC+ meeting (May 5), U.S.-China trade developments, U.S. macro data releases. |
Technical Setup:
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Current Price: $62.81
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Support Levels: $62.79 (pivot) ➔ $61.53 ➔ $60.23
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Resistance Levels: $63.31 ➔ $64.83 ➔ $65.97
Trade Idea:
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Bias: Bearish below $63.31.
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Entry (Sell): Near $63.00–$63.31 resistance zone, depending on price action confirmation.
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Target 1: $62.00
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Target 2: $61.50
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Stop Loss: Above $64.00 (above trendline resistance and minor highs).
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Risk Management: Aim for at least a 2:1 reward-to-risk ratio, given ongoing volatility around macro headlines.
Key Risk Events:
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May 5 OPEC+ meeting (possible further production increase announcement)
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Developments in U.S.-China trade negotiations
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U.S. economic data releases impacting growth expectations
Summary:
Crude oil remains in a vulnerable position as macroeconomic headwinds, OPEC+ supply increases, and technical weakness weigh on sentiment. A confirmed break below $62.79 support could trigger a move toward $61.50 and lower. However, if geopolitical tensions ease or supply fears moderate unexpectedly, a short squeeze toward $64.83–$65.97 could unfold.
Caution is warranted as price action remains headline-driven.
Check out more FX Trade Setups on our forex page.
