Oil managed to regain momentum during the Asian session despite oversupply. Oil breaks below critical support at $20 per barrel, can bulls regain momentum? What are the charts and technical indicators are saying? Read more to find further insights into today’s Oil Technical Analysis.
April 16, 2020 | AtoZ Markets – Oil is currently trading around $19.80 area and trying to decline. Moreover, the price reached $19.10 earlier this morning then bounced higher, and broke above $20 area but failed to sustain. As per the current price action, as long as the price residing below $20 area, the overall bias may remain bearish in the coming days.
Oil price dropped to their lowest level in the past 18 years during the previous session. Moreover, the International Energy Agency (IAE) published a monthly report, which said that “There is no feasible agreement that could cut supply by enough to offset such near-term demand losses. However, the past week’s achievements are a solid start.”
On the other hand, the Energy Information Administration (EIA) said overnight, “The U.S. Crude Oil inventory climbed by 19.2 million barrels on 10th April. Besides, the American Petroleum Institute (API) estimated a 13.1 million barrel might increase on Tuesday. Moreover, International Brent Oil Futures rose 3.21%, to $28.58, and the U.S. Crude Oil WTI Futures climbed 2.92%, to $20.45 today.
Oil Technical Analysis – Breaks Below Critical Support
WTI is currently residing near $19.80 area, and the Oil price is quite indecisive. Oil tried several times to break above $27.50 area but failed to sustain.
Image: Oil 4 Hour chart
According to the 4-hour chart, WTI is currently residing around $19.80 area, and the current momentum is quite volatile and indecisive. As per the current price action context, if the price can have a 4-hour bullish impulsive close above $20 area, the bulls may regain momentum and push the price higher towards $27.50.
Furthermore, the dynamic level of 20 EMA is currently residing above the price. So, if the price can break above the dynamic level impulsively, the bulls may push higher in the process. Besides, the MACD lines are residing below 0.00 level and may have a bullish intersection soon.
Are Oil Bears Going to Dominate the Market Further?
According to the Daily chart, WTI is currently trading around $19.80 area and trying to decline. As per the current scenario, if the price pushes lower and closes below $20 area with a daily candle, the bears may push the price down towards $15 in the process. Alternatively, if the price can have a daily close above $20, the bulls may take over the market and push the price higher towards $27.50 area.
Image: Oil Daily Chart
Moreover, the dynamic level of 20 EMA is currently residing above the price, which may act as a strong resistance. In contrast, a break above the dynamic level may lead to the price upward. Besides, the RSI line is currently residing above the oversold level 30, and rising upside gradually.
To conclude, Oil has been indecisive when other commodities are recovering well in this COVID-19 pandemic. An impulsive daily close above $20 is very important to find the definite bullish momentum in the coming days.