Oil may Bounce Higher Rejecting from $50.50 Support

Oil may Bounce Higher Rejecting from $50.50 support which might lead the price to $55 area. As the overall trend is Bearish, the Bullish Intervention may struggle to sustain. Let’s check Oil Technical Analysis for more levels and insights. 

February 3, 2020 | AtoZMarkets.com – Oil managed to sustain the strong Bearish momentum to lead the price lower as per expectation. The Oil price is currently residing at $51.50 area after certain bounce off the $50.50.

Oil price struggling further to gain upward pressure as the lower demand in China sustains. China is the world’s largest Oil importer and having drastic fall in demand in the country has affected the Oil price significantly. Despite the current Bearish trend in place, Oil price might find a strong support at $50 area.

Chinese economy has been also affected by the spread of Coronavirus. Chinese Central Bank is trying to inject more liquidity to revive the economy. The Organization of the Petroleum Exporting Countries (OPEC) will have a meething this month about this impact on Oil price and demand. As per reports, the Oil supply in January has been lowest since 2009. Until any positive change in Libya situation and China situation occurs, Oil price may struggle to maintain any upward pressure.

Oil to Bounce Higher having Bullish Divergence

Oil recently dipped to 5 months low at $50.50. Last week the price was a bit volatile with the Bearish pressure but managed to push lower with consistent downward momentum. The dynamic levels worked as confluence along the way lower which might lead to further downward pressure in the coming days.

Oil to Bounce Higher Rejecting from $50.50 Support?

image: Oil 4 Hour Chart

According to 4 Hour chart, the price formed Bullish Regular Divergence. Since the price rejected from $54.20 area, it formed Bullish Regular Divergence along the way lower. MACD Histogram as well as the MACD line is pushing higher while the price pushing lower with confluence does indicate upcoming correction. As the price residing at the edge of $51.50 area, it may push higher towards $55 again before continuing to push lower with target towards $50.

Read More – What Factors drive Crude Oil Prices?

Oil may push much higher than expected

Oil to Bounce Higher Rejecting from $50.50 Support?

image: Oil Daily Chart

According to Daily Chart, the price far away from the dynamic level of 20 EMA, Tenkan and Kijun line. As a result, the price may revert higher to the Mean dynamic levels before continuing the Bearish trend in place. Though there is no Bullish Divergence found in the Daily chart but 4 hour Divergence may impact the upcoming price action. As per current price action, if the price manages to remain above $51.50, further upward pressure may be observed.

Despite having ultimate target at $50, certain bullish pressure and correction may be seen along the way.

To conclude, Oil pushing higher above $51.50 is an indication of Bullish intervention. It may strengthen further with a daily close higher. It may reach $55 and find resistance to continue pushing lower in the process. 

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