Oil creates new low breaking all barriers below $48 and may continue further. Bearish pressure may sustain and push towards the $45 area soon. Let’s check the Oil Technical Analysis for more levels and insights.
February 28, 2020 | AtoZMarkets – The price of Oil continues pushing lower quite impulsively after rejecting $50 resistance area. Oil creates a new low near $45.50 and may extended further. Bears hold their Bearish momentum quite well and able to push the price lower by breaking all the records.
Oil dropped 12% weekly by breaking all the records, the biggest drop in more than four years. The Global demand is in hang up, as the fears rising all over the world on spreading of the Coronavirus outside China. The Coronavirus deaths are rising continuously, which has killed more than 2,700 people in China. The COVID-19 spreading more than 46 countries and caused 57 deaths earlier.
Moreover, the investors are in fears that the epidemic may turn nationwide, and deliver a huge damage to the global economy. The World Organization said on Thursdays,” All countries need to prepare to combat the deadly Coronavirus.” The Organization of the Petroleum Exporting Countries (OPEC) and its allies including Russia said, ” They will take a responsible approach in the wake of the COVID-19 outbreak.”
On the other hand, OPEC currently reducing its supply by roughly 1.2 million barrels per day to support the Oil price. Jason Gammel, the Analyst at Jefferies, said, “We now believe the group needs to make much steeper cuts than 600,000 barrels per day recommendation from their technical committee to support prices.”
Oil Creates New Low may Continue Bearish Run Further
Oil price declined below $ 45.50 area recently and may continue towards $45 support soon. Bears are currently quite impulsive and non-volatile after rejecting $50 resistance area. According to the current price, Bearish pressure may continue further and reach the expected area soon.
image: Oil 4 Hour Chart
According to the 4-hour chart, the price is currently residing near $45.50 area and may continue the Bearish pressure further. The dynamic level of 20 EMA is residing above the current price. It may pull the price as Mean Reversion before the Bearish momentum continue towards $45 area.
Additionally, The Kijun line and the Tenkan line is also residing above the price, which may work as confluence of the dynamic level of 20 EMA. The MACD lines are residing far below from the 0.00 line, it may occur as Bullish cross over in the upcoming sessions.
Oil Bearish Pressure may Pause and Retrace towards $50 Again
According to the Daily chart, Price is currently residing near $45.50 area after an impulsive and non-volatile Bearish momentum. Oil creates new low and may continue further down towards $45 support soon. The dynamic level of 20 EMA is residing above $50, along with the Kijun line and the Tenkan line. It is far away from the current price, so it may pull the price higher as Mean Reversion. Moreover, the MACD line creating a Bullish divergence indicates that Bullish pressure is in the making which can pull the price higher towards $50.
image: Oil Daily Chart
To conclude, Oil is now residing near $45.50 and may continue to push lower towards $45 area. If Oil bounces from $45 support with a daily close, the Bulls may intervene and push towards $50 again.