Crude oil price broke the support at $50 with a daily close which may support further down move. Oil is currently residing near $50 and may continue lower if $49.35 is broken. Let’s check the oil technical analysis for more levels and insights.
February 26, 2020 | AtoZMarkets – Oil continued pushing lower after rejecting $54.35 resistance area, and may sustain the down move further. Oil managed to break below $50 with a daily close and as Bearish pressure sustains, it may reach $45. The dynamic level of 20 EMA is currently residing above the price, which may work as resistance to push the price lower.
Crude Oil price is dropping continuously with the fear of Coronavirus spreading rapidly overseas. It leads the global economy in uncertainty. After the Coronavirus spread to more countries, like Iran, South Korea, Italy and also to some of Europe’s border countries, the virus issue is taking a deep dig into the world economy. As per reports, Coronavirus death rose to 16 in Iran, which is the highest outside China.
Analyst at Sunward trading said:
“Investors unwound short position after Oil dipped below a key support level of $50, as they have done a few times earlier this month.”
He also added that the Organization of the Petroleum Exporting Countries (OPEC) cut the reduction in Libya’s output and expectations for additional production. The oil price has lost more than 7% over the past two sessions, while Bears are dominating the market from the last two weeks.
Oil broke support and may correct higher
The price recently broke below $50 support area, which was the most anticipated support level. Despite the recent Bearish pressure, the price is currently retracing higher, which may find a roof at $50.50 again.
image: Oil 1-Hour Chart
According to the 1-Hour chart, the price is currently heading higher towards $50.50 again. After the recent bounce from $49.50 area, the price is presently retracing towards a resistance area. While the price was pushing lower below $50.50 area, the price formed Bullish Regular Divergence. Therefore, Bullish current pressure has already got a confluence from the recent price action and Mean Reversion to push higher.
Current Bullish Pullback seems to be quite weak while being dominated by the Bears along the way. The dynamic level 20 EMA, Tenkan and Kijun line has been carrying the price lower as dynamic resistance along the way. So, it may also act accordingly in the coming days.
Read More – USDJPY Price Outlook – Japanese Yen Set to Fall
Crude oil price may bounce from Key Level
Oil is heading towards $49.35 critical support level with consistent impulsive pressure. After the opening of the week, the price found confluence for further Bearish pressure but may find a floor at $49.35 along with particular Bullish Intervention.
image: Oil Daily Chart
According to the Daily chart, the crude oil price is currently showing absolute Bullish pressure after having an impulsive Bearish daily close. Though there is no sign of Bullish Divergence while the price is pushing lower, $49.35 area may act as a strong support level as it worked recently.
On the other hand, the MACD lines below are on the way to have a Bearish Crossover below 0.00 level. It indicates further Bearish pressure is in the process. However, a break below $49.35 with a daily close is required for the price to continue lower.
To conclude, Oil is residing near $50 area and may find strong support at $49.35. Despite the recent Bearish pressure, an absolute counter from the $49.35 area may lead to particular upward pressure in the process. On the contrary, a break below $49.35 with a daily close will empower Bears to dominate further.