Oil bears have regained momentum and pushed the price down impulsively. Oil dropped below $40 area and had a weekly strong bearish close. How low can the price go? What are the charts and technical indicators are saying? Read more to find further insights into today’s WTI Technical Analysis.
September 9, 2020, | AtoZ Markets – Oil is currently trading around $37.40 area and trying to retrace higher. After rejecting $43 psychological resistance zone, WTI bears pushed the price downside. As per the current price action, Oil may retrace higher towards the dynamic level of 20 EMA in the coming days.
In addition, WTI Crude futures fell again on Wednesday after a sharp slide in the past session, as a bounce-back in COVID-19 cases in certain nations subverted hopes after a consistent recuperation in worldwide demand. However, record supply cuts by the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, have supported uphold prices, yet with terrible monetary figures being reported for practically every day, the standpoint for the demand for Oil stays depressing.
Oil Dropped Below as the Demand Tensions Mount
WTI is currently residing near $37.40 area and trying to recover higher. Moreover, there is a high chance that Oil may sustain the bearish pressure towards January’s event level in the days ahead.
Image: Oil 4 Hour Chart
According to the 4-hour chart, Oil dropped below and currently residing near $37.40 area. As per the current price action, if the price can have an impulsive 4-hour bullish candle close above $37 area, the bulls may push the price towards $38.50 area as a first target. The second target will be $40 area if the price can break above $38.50 area in the coming days. Alternatively, if the price reaches $38.50 area and rejects, the bears may regain momentum and decline further towards $35 area in the coming days.
In addition, the dynamic level of 20 EMA is currently residing above the price. Along with the Kijun line and the Tenkan line. The dynamic level may act as strong resistance to push the price downside. Besides, the Kijun line and the Tenkan line may work as a confluence of the dynamic level in the process.
WTI May Revert Back to the Mean
According to the daily chart, Oil dropped below and currently trading around $37.40 area. As per the current price action, if the price can have a daily candle close above $37 area, the bulls may recover higher towards $40 area in the coming days. Along with this, if the price reaches $40 area and rejects with an impulsive daily bearish candle close, the bears may sustain the bearish trend towards $35 area in the days ahead.
Image: Oil Daily Chart
Furthermore, the dynamic level of 20 EMA is far away from the current price. It may pull the price higher as a mean reversion. Besides, the Stochastic Oscillator lines are currently residing below the oversold level 20 and may have a bullish cross over. It indicates that the price may recover higher in the days ahead.
To conclude, after an impulsive bearish momentum, the price should retrace at least towards the Fibo level 50. A daily close is required to identify the definite momentum in the coming days.