Oil Bulls Struggling to push higher above $50.50 price area while residing at the edge of $50 with a daily close. The price found new support at $49.40 area. Let’s check Oil Technical Analysis for more levels and insights.
February 11, 2020 | AtoZMarkets.com – Oil is currently correcting at $50 area while having certain dips along the way. The Bearish trend has been quite non-volatile since it started after the price rejected $65.50 area with a daily close.
After the recent impulsive downward pressure, Oil managed to rise 1% recently. Certain Bullish momentum and correction in the current market is considered to the profit taking phase of the Bears. Trading volume in the Oil has been very weak which may confluence to further downward pressure in the coming days.
As the number of dead due to Coronavirus is rising everyday, so as the pressure on Oil. The virus has reported to spread over 24 countries till now and it is turning out to be a big caution sign for whole world. Coronavirus not only affected the Chinese economy but also the economy of Japan and Singapore as well. As the worries increase, Oil may struggle further to sustain current price momentum. As a result, the price may push further down in the process.
Oil found new Support at $49.40 area – Will it Hold?
Oil Bulls has been struggling to push higher recently and found a strong bottom at $49.40 area by bouncing off the level twice. While the price broke below $52 area, it has formed Bullish Divergence along the way.
image: Oil 4 hour chart
Oil is currently showing certain Bullish pressure after bouncing off the $49.40 bottom area. The price has turned quite volatile but the volume has decreased. The dynamic levels are working as confluence along the way to push the price lower below $50.50 area.
As the price managed to break below $52 area, it push lower below $50 but also formed Bullish Divergence along the way. MACD lines are currently pushing higher creating certain higher high based waves in the process. Though the price is still under Bearish pressure but a break above $51.50 will confirm further upward surge.
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Oil to correct until a Bullish Break above $51.50 is seen
image: Oil daily chart
According to Daily chart, the price is correcting inside the range between $49.40 to $51.50 area. The price did show certain Bearish pressure along the way, but currently slowing down with the momentum. Though the Bearish Bias is still quite strong, but a break above $50.50 may lead the price to push higher again.
Even though, Oil breaks above $51.50 or touch $53 area, it will be considered as Retracement rather than a full reversal. As the dynamic levels are closing in to provide confluence to the Bearish trend, further downward pressure may be seen in the coming days.
To conclude, Oil residing below $50.50 area may correct further until a break below $49.40 is seen. A break below will lead to further downward pressure. On the contrary, a break above $50.50 will push the price higher as Retracement despite current Bullish Struggle.