Oil Breached Resistance area of $51.50 recently which was the most anticipated level. The price is still volatile may show some spikes along the way. Let’s check the Oil Technical Analysis for more levels and insights.
February 17, 2020 | AtoZMarkets.com – Oil has been quite volatile and corrective recently but managed to break above $51.50 resistance area. Recent Bullish move was quite remarkable but there are certain spikes built around it. The price did create a new recent high by going above $51.50 but it’s indecisive as the volatility persists.
The Coronavirus impacted the Oil price significantly which is still in process. As per the International Energy Agency (IEA), the Virus has already resulted in Oil demand to fall by 435,000 barrels per day. It is a lower drop since the Financial Crisis in 2009.
Saudi Arabia is still pushing to get the Oil price to a proper level. As Russia did not accept the request from OPEC+, the supply cut is not aligned with demand decline yet. OPEC+ committee still recommends additional cutbacks of 600,000 barrels per day to normalize the Oil price. Moreover, the Asian economy may also see some slowdown due to the Coronavirus issue impacting the activities in Singapore and Malaysia.
Oil to Throwback to $51.50 as Retest and Bounce?
Oil is currently residing above $51.50 area after Breaching the Resistance. The price carried by the dynamic level while being extremely volatile along the way.
image: Oil 1 Hour chart
According to the 1-hour chart, the price is still volatile and corrective despite recent break above $51.50 area. The dynamic levels like 20 EMA, Tenkan and Kijun line has been supporting the price to hold higher. Despite the Bullish pressure, certain throwback towards $51.50 may occur as the price continues its bullish trend in the coming days.
Oil Breaching Resistance already empowered Bulls
As per MACD, the Histograms and MACD lines are showing a downward slope as the price progress higher. As a result, certain Bearish Divergence is emerging along the way which may push the price lower. So, Bears may takeover the price for a certain period but as Retracement for the upcoming move towards $53 area.
To conclude, Oil residing above $51.50 does indicate strong Bullish bias in the process. Currently as per price action, certain retrace towards $51.50 may occur before the Bullish trend continue with proper consistency towards $53 area.