Current trend

During the Asian session, prices for WTI Crude Oil continued their downward trend from the beginning of the week and remained at 79.10. Although investors are counting on some easing of geopolitical tensions in the Middle East, on April 30, Israeli Prime Minister Benjamin Netanyahu announced his readiness to carry out an offensive operation on the city of Rafah, regardless of the reaction of the Palestinian group HAMAS to put forward proposals for a ceasefire and the return of hostages. Additional pressure on the asset is exerted by an increase in the strategic reserve in the United States: according to a report from the Energy Information Administration of the US Department of Energy (EIA), for the week of April 26, it increased by 7.265M barrels after a decrease of 6.368M barrels earlier, although analysts expected a decrease of 2.3M barrels.

The American dollar is supported by increasing forecasts about the long-term preservation of the “hawkish” course of the US Fed. At the end of yesterday’s meeting, the indicator was kept at 5.50%, and the head of the department, Jerome Powell, noted that inflation in the country remains high, and the financial authorities have no guarantees of its sustainable slowdown soon. In addition, he announced a reduction in balance sheet reduction from 60.0B dollars to 25.0B dollars per month. At the end of the week, data from the American labor market is due: according to forecasts, the April nonfarm payrolls will be 243.0K, slightly less than 303.0K last month, and the average hourly wage may decrease from 4.1 % to 4.0% but MoM the figure may grow by the same 0.3%. The unemployment rate is not expected to change from its previous value of 3.8%. Tomorrow at 16:00 (GMT 2), the Institute for Supply Management (ISM) service PMI is due: preliminary estimates suggest an increase from 51.4 points to 52.0 points.

Meanwhile, the global correction continues in the oil market, and, according to the latest report from the US Commodity Futures Trading Commission (CFTC), last week, the number of net speculative positions in WTI Crude Oil decreased from 290.5K to 264.8K. As for the dynamics, there is a noticeable drop in the number of positions in all categories, which is reflected in the quotes: the balance of the “bulls” among producers amounted to 315.948K against 307.382K for the “bears”, while last week buyers reduced the number of contracts by 17.878K, and sellers – by 3.927K, confirming the fall in demand for the asset.

Support and resistance

On the daily chart, Bollinger Bands are declining: the price range is expanding but not as fast as the “bearish” sentiment develops. The MACD indicator is declining, maintaining a sell signal: the histogram is below the signal line. Stochastic is directed downwards but is near the lows, indicating that the instrument may become oversold in the ultra-short term.

Resistance levels: 79.81, 81.00, 82.00, 82.62.

Support levels: 78.52, 78.00, 77.00, 76.00.

Trading tips

Short positions may be opened after a breakdown of 78.52, with the target at 76.00. Stop loss – 79.81. Implementation time: 2–3 days.

Long positions may be opened after a rebound from 78.52 and a breakout of 79.81, with the target at 82.00. Stop loss – 78.52.