Oil Breaks below the $31.50 area and it may continue to Decline Further. The price of Oil failed to sustain above $35 area. Let’s check the Oil Technical Analysis for more levels and insights.
March 12, 2020 | AtoZ Markets – Oil is currently pushing lower after rejecting $35 area. The price failed to recover higher to fill up the gap and rejected by the dynamic level. The Bears are currently quite strong and the price may decline lower in the coming days.
The price war between Saudi Arabia and Russia, giving multi-billion dollar profit opportunity to the World’s Largest Oil Traders. Riyadh and Moscow resist each other by producing a vast quantity of Oil into an already over flooded market. It is allowing the Traders to make money by buying Oil at a low price, reserve it and selling it forward.
Oil Breaks Below $31.50 indicates further Bearish Pressure
Oil is now trading at $31.20 area and trying to push lower. The price is showing some Bearish pressure after the market open today. As per the current situation, the Bears may continue further decline and may reach $27.50 area again.
Image: Oil 4 Hour Chart
According to the 4-Hour Chart, Oil is currently residing near $31.20 area and pushing lower. After a certain rejection from $35 area, Oil broke below lower towards $31.50. Oil may decline further lower towards $27.50 support area again. Moreover, the price faced strong resistance from the dynamic level of 20 EMA and failed to break above.
On the other hand, Oil also rejected by the Fibonacci 61.8 level and now continue pushing below the 78.6 level. If the price maintains the Bearish pressure below 78.6 level, Oil may reach lower towards $27.50 area, which was acted as support before. Besides, the MACD indicator lines are residing below 0.00 level and showing Bearish cross in the making. As per current price action, there is a high chance that the price may decline further and reach lower towards $27.50 area again in the coming days.
Oil Bulls Still Active may Fill up the Gap
According to the Daily chart, the price of Oil is currently trading at $31.50 area after Oil break below $33. The price failed to recover higher, and Oil rejected $35 area. There is still a chance of that Oil may fill up the Bearish gap in the coming days. If Oil pushes further lower and bounce from $27.50 area with a daily close, the Bulls may take over the market again and continue higher towards $42 area.
Image: Oil Daily Chart
Moreover, according to the RSI indicator, Oil price is already in the oversold position and residing below 30 level. The MACD indicators line are far away from each other and residing below 0.00 level, which indicates that the lines may cross each other upside shortly. The dynamic level of 20 EMA is also above our expected $42 resistance area which may pull the price as Mean Reversion. As per the RSI, MACD and 20 EMA indicators, there is a high chance of Bulls may take over in the coming days.
To conclude, Oil Bears are currently quite impulsive with their gains which may lead the price towards $27.50. Though the Bears are currently active, but the Bullish bias is still in the market.