Oil has become volatile and currently trying to retrace downward. Can Oil Sustain Bullish Momentum Above $40 per Barrel? What are the charts and technical indicators are saying? Read more to find further insights into today’s WTI Technical Analysis.
September 21, 2020, | AtoZ Markets – Oil is currently trading around $40.10 area and trying to push lower. However, the price is still holding the bullish momentum above the dynamic level of 20 EMA on the daily chart. As per the current price action, WTI may face strong support around $40 area in the coming days.
WTI crude prices fell on Monday on the possible return of output from Libya as flourishing COVID-19 cases likewise added to stresses over worldwide demand, albeit a hurricane heading for the U.S. Gulf of Mexico restricted losses. Moreover, laborers at Libya’s major Sharara field have restarted activities, two engineers working there stated, after National Oil Corporation declared a fractional lifting of power Majeure. In any case, it was as yet muddled when production may restart.
Can Oil Sustain Bullish Pressure As Rising COVID-19 Cases Affecting Global Demand?
Oil is currently residing near $40.10 area and trying to decline. Furthermore, the price is currently facing strong support at the dynamic level of 20 EMA on the intraday chart.
Image: Oil 4 Hour Chart
According to the 4-hour chart, Oil may sustain bullish as the price is currently trying to bounce upside from the dynamic level. As per the current price action, if the price bounced higher and had an impulsive bullish candle close, the bulls may recover higher towards $41.50 area as a first target. The second target will be $43.50 area if the price breaks above $41.50 area in the coming days. Alternatively, if the price breaks below $40 support level with an impulsive bearish candle, the bears may sustain the bearish pressure towards $38 area in the coming days.
In addition, the dynamic level of 20 EMA is currently residing below the price, which may work as strong support in the days ahead. Besides, the MACD lines are currently residing above the 0.00 level. It indicates that bulls are still in the market may strike upside. However, the MACD lines had a bearish intersection above 0.00 level, which indicates that bears may sustain bearish pressure in the process.
WTI May Bounce Back From the Dynamic Level
According to the daily chart, Oil may sustain bullish as $40 is a psychological support level. As per the current price action context, if the price bounce higher from $40 area with an impulsive bullish candle close, the bulls may climb upside towards $43.50 area in the days ahead. On the contrary, if the price breaks below $40 area with an impulsive bearish daily candle, along with the dynamic level, the bears may sustain the bearish pressure towards $38 area as a first target. The second target will be $36 area if the price breaks below $38 in the coming days.
Image: Oil Daily Chart
Also, the dynamic level of 20 EMA is currently residing below the price. It may act as strong support in the process. Besides, the RSI line is currently residing below the overbought level 80 and trying to move downside. It indicates that bears may sustain bearish pressure further in the coming days.
To conclude, Oil is currently trading near $40 area, which is a crucial psychological level. A daily close is required above or below $40 area to identify the definite momentum in the days ahead.