Oil dropped record low at $27.50 after the market open today. Oil is now trading at $27.50 area may push higher to fill up the biggest gap in the market. Let’s check the Oil Technical Analysis for more levels and insights.
March 9, 2020,| AtoZ Markets – The price of Oil dropped to record low at $27.50 after the Asian market opens. Oil started trading today with a significant gap in markets, which took the Oil price at 2016’s low. Bulls may gain certain momentum to saturate the big crash on the Oil market in the coming days.
Saudi Arabia started a price war with Russia by slashing its Oil selling price and promise to let off its tied supply onto a market because of the Coronavirus outbreak. Crude Oil fell by $11.28, or 30% to $27.50 a barrel. That was the most significant drop since the first Gulf war in January 1991. It also the lowest since February 22, 2016.
Moreover, Saudi Arabia is one of the world’s largest exporter is now trying to punish Russia, the second-largest producer of Oil, because of Russia had refused further production cuts proposed by the Organization of the Petroleum Exporting Countries (OPEC). OPEC and its other allies agree to further cuts to stabilize the falling price of Oil caused by the economic fall from the China Coronavirus outbreak.
Oil Dropped Record Low at $27.50
Oil is now trading at $27.50 and trying to continue to push lower. After a weekly close below $42 area, the Oil dropped to record low $27.50 area quite impulsively with a gap. As per Mean Reversion, the price of Oil may retrace higher but when it will, is still a big question.
Image: Oil 4 Hour Chart
According to the 4-hour chart, Oil is currently residing near $27.50 key support area. The price of Oil started trading at $34.50 after the market opens today and impulsively push the price lower towards $27.50 area.
Moreover, the dynamic level of 20 EMA is residing above the current price, along with the Kijun line and the Tenkan line. It may pull the price higher as Mean Reversion. Oil may retrace higher at least towards $42 area before continuing the Bearish trend in place. On the other hand, the MACD indicator lines are residing below 0.00 level, and the MACD histogram volumes are also below the 0.00 level, indicating Bears are in the lead.
Read More – Why Women Trade Better Than Man?
Bearish Pressure may Sustain Further after Retracement
According to the Daily chart, the price of Oil is currently trying to breach below $27.50 and trying to continue to push lower. After a daily close below $42 area, Oil reaches at $27.50 today quite impulsively with a gap. As per current price action, if Oil can have a daily close above $27.50 support area, Bulls may take the price higher towards $42 as a retracement.
Image: Oil Daily Chart
Moreover, the dynamic level of 20 EMA is residing above $42 resistance area. The Kijun line and the Tenkan line are also far away above the current price. The dynamic level of 20 EMA may pull the price as Mean Reversion, and the Kijun line and the Tenkan line may work as Bearish confluence.
To conclude, After Oil dropped record low near $27.50 area, the price may now retrace higher to fill up the gap. If Oil can have a daily close above $27.50 support area, the price may retrace higher towards $42 area in the coming days. Moreover, It should be noted that the uncertainty in the Global Economy market may take the price lower as Coronavirus fears are increasing day by day.