Oil recently managed to bounce from the $20 support area with a daily close. Oil Bulls regained momentum, can WTI continue higher in the days ahead? What are the charts and technical indicators are saying? Read more to find further insights into today’s Oil Technical Analysis.
April 3, 2020 | AtoZ Markets – Oil is currently trading around $23.50 area with certain Bearish pressure along the way. WTI Bulls successfully regained momentum and reached near $27.50 area but could not sustain further to break above it. As per the current price action, the price is currently retracing lower, which may lead to further upside pressure in the coming days.
The U.S. Crude Oil WTI futures gained almost 25% during yesterday’s New York session as U.S. President Donald Trump tweeted that, “Russias and Saudi Arabia had come to an agreement to cut off nearly 10 million barrels, and may sustain further.” He added, “If the deal implements, that will be great for Oil and gas industry.”
On the other hand, Saudi Arabia calls for an emergency meeting between OPEC and its allies (OPEC +) via the Saudi Press Agency last Thursday. Moreover, International Brent Oil Futures fell 1.55% to $29.17, and the U.S. Crude Oil WTI Futures rose 4.42% to $24.2 today.
Oil Bulls Regained Momentum After Breaking the Corrective Phase
WTI is currently residing near $23.50 area after Oil Bulls regained momentum. The price successfully broke above the corrective phase but still residing below $27.50 area.
Image: Oil 4 Hour Chart
According to the 4-hour chart, Oil is currently trading around $23.50 area while being held by the Kumo Cloud as support. Recently, the price has successfully broke above the dynamic levels and had an impulsive Bullish close. As per the current price action context, Oil may retrace down towards the dynamic level of 20 EMA before it recovers higher. So, if the price pushes higher after retracement and breaks above $27.50 area, the Bullish pressure may sustain further towards $36 in the days ahead.
Furthermore, the dynamic level of 20 EMA is residing below the current price, which may work as strong support. Besides, the Kijun line and the Tenkan line are also below the current price and may work as a confluence of the 20 EMA. Moreover, the RSI line is residing below the overbought level, which may show a certain bounce from the following upward trend line adding to the overall Bullish confluence in the making.
WTI Bears Remains Active Below $27.50 Area
According to the Daily Chart, WTI Bears are still active while the price remains below the resistance around $27.50 area. The price pushed higher during the last New York session but failed to break and sustain above $27.50 area. As per the current scenario, Oil needs to break above $27.50 area to recover higher in the days ahead.
Image: Oil Daily Chart
So, if the price breaks above $27.50 area with an impulsive daily close, the Bulls may take the price higher towards $36 area. Though the overall bias is still Bearish, as long as the price remains below $27.50 area, the correction may sustain further in the coming days.
Apart from this, the dynamic level of 20 EMA is residing above the current price, which may act as a strong resistance. So, if the price can break above the dynamic level, the Bulls may regain stable momentum. Moreover, the Stochastic Oscillator lines broke above the symmetrical triangle; a further upward move may add some confluence to the price to climb higher. Besides, the MACD lines had a Bullish intersection recently, which is a good sign of further Bullish pressure.
To conclude, Oil price may remain Bearish as long as the price resides below $27.50 area. Despite the recent Bearish trend, Bulls may recover higher if the price can break above $27.50 area.