WTI Crude Oil Eyes $59.30 Recovery as Bulls Test Key Levels

WTI Crude Oil (USOIL) is trading at $58.58 as traders are cautiously optimistic about the U.S.-China trade talks and the Fed’s latest economic signals. Despite the recent volatility, technicals suggest upside if key resistance is broken. Here’s the breakdown for traders.

U.S.-China Talks and Fed Outlook

Oil bounced back on Thursday after a big drop the previous day as U.S.-China trade talks provided a short term boost. U.S. Treasury Secretary Scott Bessent will meet with China’s top economic official on May 10 in Switzerland, a critical moment for markets to see if the trade war de-escalates. The outcome of these talks will impact global oil demand as the U.S. and China are the world’s largest oil consumers.

But the Fed’s decision to hold rates steady while warning of rising economic uncertainties capped the gains. A stronger U.S. dollar, boosted by the Fed’s dovish tone, has further pressured oil as it makes dollar denominated commodities like crude more expensive for international buyers.

Technical Levels

From a technical perspective, WTI is testing the 50-hour EMA at $58.59, a short term resistance. Key levels to watch:

• Resistance:

  • $58.61 (50-hour EMA)

  • $59.30 (previous swing high, strong resistance)

• Support:

  • $57.75 (recent demand zone, critical support)

  • $57.10 (next major support)

A break above $58.61 could set up a move to $59.30, a big target for bulls. But a failure to clear this level may retest $57.75 and increase the risk of a deeper pullback.

Trade Setup and Risk Management

For longs, a breakout above $58.61 with volume could be the entry point, targeting $59.30. To limit downside risk, put a tight stop-loss below $58.00 as a drop back to $57.75 could invalidate this setup.

Key Points:

• Watch for a clean break above $58.61 with strong volume for confirmation.

• Use tight stop-loss levels to manage risk in volatile markets.

• Monitor U.S.-China trade news and Fed commentary for potential catalysts.