Corona Virus Second Wave Might Drop Oil Price

Oil has become quite volatile and corrective but maintains the price above $25 area.  Oil price fall with the concern of a second COVID-19 pandemic wave. Can WTI bulls recover further? What are the charts and technical indicators are saying? Read more to find further insights into today’s WTI Technical Analysis.

May 11, 2020, | AtoZ Markets – Oil is currently residing near $25.50 area and quite corrective. Oil price fall today during the Asian session and had an intraday close below $26 area. As per the current scenario, WTI price may retrace down before continuing the bullish trend in the coming days.

Oil Price Fall as Fears Increased of Oversupply

The U.S. States have loosened their lockdown extent, and the demand compressed by the Coronavirus is gradually increasing. Moreover, the reports of new prevalence in South Korea and Wuhan soured investors feeling. Furthermore, according to the data from Johns Hopkins University, there were over 4 million COVID-19 cases as of May 11.

Along with, fears of a supply gobble continue to insist although the manufacturer has cut supply as supply tanks rapidly fill up towards retention. In addition to this, President of Lipow Oil Associates, Andrew Lipow said on an interview with CNBC, “I expect now prices will pull back to $20 a barrel because scepticism will come into the market about the compliance of OPEC+ on the production cuts. Moreover, all it takes is one or two countries not to comply, and it could open the door for others.”

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WTI Bull Run can push prices higher

WTI is currently trading around $25.50 area and trying to push higher. Moreover, the price faced resistance at $27.50 area several times and closed below it on the previous week.

Oil Price Fall With the Concern of Second COVID-19 Wave

Image: Oil 4 Hour Chart

According to the 4-hour chart, Oil is currently residing near $25.50 area and trying to bounce higher from the dynamic level. As per the current price action, if the price can break above $27. 50 area with an impulsive bullish candle, the bulls may recover higher towards $36 area in the days ahead. Alternatively, if the price rejects $27.50 area again with an impulsive bearish candle, the bears may regain momentum and decline towards $20 area in the process.

Furthermore, the dynamic level of 20 EMA is currently residing below the price, which may act as a strong support to push the price higher. In contrast, if the price breaks below the dynamic level, the bears may regain momentum and push lower. Besides, the MACD lines are currently residing above the 0.00 level, which indicates bulls are still present in the market.

To conclude, Oil price fall indicates that the price may take deeper retracement after an extended period of a bullish bias. An impulsive daily close in requires above or below $27.50 area to find the definite momentum in the coming days. 

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