Oil is testing the strong support • Edge of trading a place for traders

Crude oil prices have been volatile recently, driven by trade tensions and supply shifts. West Texas Intermediate (WTI) dipped below $60 per barrel earlier this week, hitting a four-year low before recovering to around $61-$62. Brent crude also slumped, falling below $65 for the first time since August 2021. The price drop was triggered by escalating U.S.-China tariffs, with China imposing 84% duties on U.S. goods in response to U.S. levies, raising fears of a global recession that could dampen oil demand. OPEC+’s decision to ramp up production by 411,000 barrels per day in May 2025, far above the expected 135,000, added further pressure.

On the flip side, U.S. crude inventories fell by 1.1 million barrels for the week ending April 4, signaling tighter domestic supply, though this was overshadowed by macroeconomic concerns. Goldman Sachs cut its Brent forecast to $62 by end-2025, citing oversupply risks. Russia’s Urals crude also hit a 2023 low near $50, straining its budget. Meanwhile, Trump’s partial tariff rollback for countries except China sparked a brief 4% rally in U.S. crude. If WTI falls to $50, U.S. shale output could drop by over 1 million barrels daily within a year, per S&P Global.

Oil has recently fallen below 63.40 for the first time since December 2021. It has tested 61.8% of the Fibbo retarcement from the April 2020 low and March 2022 high. This could be a pullback into a second long-term upside wave, as I expect an upside reversal from here. Learn to Trade CFDs profitably.

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XAGUSD’s weekly chart below reveals a long-term wedge that is reaching the apex. Strong support now is 58.4. From here, I am looking at a possible swing higher to 70, which is the strong upside resistance and a wedge falling trend line. Only a break below 53 will invalidate the upside reversal and a strong continuation higher.

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How can we trade this?

It is a fact that a strong downside resistance for Q2 2025 is 70, and if we get a confirmation of a reversal higher and a sustained extension above 63.40, we could see a strong continuation higher in the third long-term Elliott Wave. You can try with a long-trade entry here first with an SL below 58. In the case that your position is stopped, reverse to short trade. For inquiries about account management or copy trading, please write to [email protected] or contact me on WhatsApp or Live chat.

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How can we trade this?

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