Oil declines and corrects in the Bearish trend towards $50 support area. As of the non-volatile Bearish trend in place, Oil managed to sustain the Bearish momentum. Let’s check Oil Technical Analysis for more levels and insights.
January 28, 2020 | AtoZMarkets.com – Oil is correcting between the price range of 52.10 to 53.50 area since the week started with a Gap. There has been low volatility in the price recently while having no definite trend momentum to push lower significantly. As the Coronavirus problem sustains, Oil may struggle to push the price higher along the way.
Oil price declined for 6 days straight and may continue to push further downwards in the coming days. As the spread of Coronavirus in China continued, the Chinese economic growth as well as the Oil demand was hit very badly. The Oil investors are currently very concerned about the impact of Oil as World’s second largest economy is struggling.
Most of the countries issued warning against visiting China and nationwide travel in China get can also get stopped. As the demand for Oil soars, there are chances of Oil price to push much lower in the coming days.
Oil price correcting before another push lower?
The Bearish Trend in Oil is still quite strong and have the capacity to push further downward. The price residing below $55 area after the Gap unfilled is an indication of strong Bearish Bias in the market.
image: Oil 1 Hour Chart
According to 1 Hour Chart, the price is currently pushing higher towards $53.50 after the bounce off $52.10 area. The Bearish Trend is still quite strong and may lead the Oil price lower towards $50 support area soon. The dynamic level 20 EMA, Tenkan and Kiju line is residing at the edge of the price line as resistance. Moreover, The Chikou Span (Green Line) is currently indecisive as it resides inside the price line.
The price moving higher towards $53.50 may also react to the Kumo Cloud’s dynamic resistance and create confluence for further downward pressure. As the price having no sign of Bullish Divergence along the way is indicating the sustainablity of the Bearish pressures along the way. Despite the Oil correcting at Bearish Trend in place, further downward pressure may occur.
Read More – Why Crude Oil Fall?
Oil decline may find Support before $50
image: Oil Daily Chart
According to Daily chart, the Bearish decline has been quite sharp and sustainaing since the price rejected off the $65.50 resistance area. After the Bearish Gap, the price failed to fill it up and continue lower. As the current Bearish momentum sustains, the price may reach $50.50 to $51.50 support area before reaching $50 zone.
As there is no sign of Bullish Divergence in MACD while the lines are residing below 0.00 area may lead the price much lower in the process. Despite having strong Bearish trend in place, if the price revert back to the Mean 20 EMA, it will have great possibility for a strong bounce higher from support.
To Conclude, Oil may reach $50 support zone and bounce back higher despite the strong Bearish trend in place. Though there is no sign of Bullish intervention currently, but psychological area at $50 may push the price higher.