Oil continues Bearish Trend towards $50 support area despite recent Bullish intervention. The price residing below $53 may reach $50 support in the coming days. Let’s check Oil Technical Analysis for more levels and insights.
January 30, 2020 | AtoZMarkets.com – Oil has been in a non-volatile Bearish Trend since it bounced from $65.50 area. Recently upon reaching $52 support area, the price managed to push higher above $54.30 area but could not sustain further. Currently the price has regained its Bearish Momentum and continuing to push lower in the process.
Oil price growth is under pressure after the spread of Corona Virus all around China. Recently, the number of deaths from the virus has climbed to 170 which lead to severe impact on the transports. Airlines around the world is currently avoiding flights to China as warnings from the Government about the virus. As the transport sector struggles, the Crude Oil fails to sustain the Bullish Momentum it gained recently.
Oil is residing at 3 months low currently while the market is trying to co-op with the economic growth damage. As the economy struggles and transport sector demand has faded, Oil price may reach a new floor. The World Health Organization (WHO) is going to sit for a meeting today to reconsider the Virus issue and take decision on further actions. Corona Virus being one of the strong factor to drive the current market price may sustain the Bearish trend in Oil until any solution is found in the coming days.
Oil covered the weekly Gap continuing Bearish Trend
The week started with a Gap which was recently recovered and finding resistance at the price moved lower continuing the Bearish trend.
image: Oil 1 Hour Chart
According to 1 Hour chart, the price managed to break below the rising Channel with an impulsive Bearish momentum. The rising Channel managed to cover the weekly Gap while finding intraday resistance at $54.30 area. As the price bounced off the resistance at $54.30 area with certain rejections, it managed to break below the dynamic level of 20 EMA.
Currently the price is pushing lower with confluence to the downward sloping dynamic level 20 EMA and MACD lines below 0.00. The Bearish pressure may extend further as it remains below $55 area while the target remains same at $50 support area. Perhaps certain correction and volatilty in the intraday chart can be seen along the way.
Read More – What Factors Drive Crude Oil Prices?
Oil may find strong Support at $51.50
Oil is currently quite impulsive with the Bearish pressure which engulfed the recent Bullish intervention. Though the overall Bearish Bias is currently targeting $50 support area but certain Bullish intervention may again occur at certain price point.
image: Oil Daily Chart
According to Daily Chart, the Bullish Engulfing candle was recovered yesterday with strong Bearish impulsive daily candle. The Bearish pressure currently regain control and momentum over the Oil price which may bounce higher upon reaching $51.50 area. Despite having target at $50 support area, the price may bounce higher towards $55 area again and revert back to the Mean 20 EMA before continuing the Bearish run. Though it is not quite certain as a break below $51.50 will extend the current Bearish pressure further.
To conclude, The Bearish Bias in Oil is curerntly quite strong to push further downward with target towards $50. But a bounce off the $51.50 may lead to certain retracement reverting back to the Mean price area at $55.