Oil has successfully recovered towards $40 area after breaking above $35 with a weekly close. Oil found resistance at $40 area, but bulls are still optimistic about recovering higher. Can WTI climb further? What are the charts and technical indicators are saying? Read more to find further insights into today’s WTI Technical Analysis.
June 9, 2020, | AtoZ Markets – Oil is currently trading around $38 area and trying to push lower. WTI has recovered nearly fifty per cent of the massive drawdown, which has occurred because of Coronavirus pandemic. As per the current price action, Oil price may now retrace down towards the dynamic level in the coming days.
Goldman Sachs has said in a note that the Oil price may pullback in the days ahead due to the uncertain way of the future need and a “daunting” inventory overhang. They’re expecting the WTI price to reach $35 per barrel in a short term basis, depending on last day’s high. Moreover, Oil price reached at three-month highs on yesterday after OPEC and its allies, including Russia agreed to extend output cut by 9.7 million barrels per day.
On the other hand, the Wall Street Bank said “The collapse in (refining) margins to unprecedented lows is reflective of both over-valued crude prices as well as a more moderate demand recovery, two pillars of our short-term bearish view”
Oil Found Resistance May Decline Further in the Process
WTI is currently residing near $38 area and try to decline. The price also broke below the dynamic level of 20 EMA on the intraday chart, which indicated further bearish pressure might take place in the coming days.
Image: Oil 4 Hour Chart
According to the 4-hour chart, Oil found resistance around $40 area and currently residing near $38. As per the current scenario, the bears may push the price down towards $35 area again before sustaining the bullish momentum.
In addition, the dynamic level of 20 EMA is currently residing above the price. Along with the Kijun line and Tenkan line. The dynamic level of 20 EMA may work as strong resistance and push the price down. Besides, the Kijun line and the Tenkan line may work as a confluence of the dynamic level. Moreover, the Stochastic Oscillator lines are currently residing below the 60 levels and gradually sloping down. It indicates that bears are quite strong may sustain the bearish pressure further.
WTI May Reverse Back to the Mean
According to the daily chart, Oil found resistance around $40 area and had a daily bearish candle close below it. As per the current price action, the bearish pressure is quite impulsive may sustain towards $35 area in the coming days. So, if the price reaches $35 area and bounces higher, the bulls may push the price higher towards $45 in the process.
Image: Oil Daily Chart
Furthermore, the dynamic level of 20 EMA is currently residing below the price, which may act as strong support. Also, the MACD lines are residing above 0.00 level and may have a bearish intersection. Besides, the histograms are also sloping down gradually, which indicates that bulls are losing the momentum slowly.
To conclude, after gaining a good amount of pips Oil found resistance around $40 area. The bullish trend may continue further if the dynamic level of 20 EMA works as strong support.