Oil price dropped as OPEC+ output cut had no significant impact on the market. Oil price consolidating above $22 area, can WTI recover higher? What are the charts and technical indicators are saying? Read more to find further insights into today’s Oil Technical Analysis.
April 14, 2020 | AtoZ Markets – Oil is currently trading around $22.60 area and trying to recover higher. Oil price did drop towards $22 area earlier but failed to break below and continue further. As the current price action is quite volatile and corrective, WTI may struggle further in the coming days.
Oil price showed certain volatility today as an emergency OPEC+ meeting took place to finalize a 9.7 million barrel cut in daily production basis on 12th April. It is the most massive historical output cut for the Oil industry. Moreover, the reduction will start with 7.7 million barrel production cut on May 1, and it may sustain until the end of the year. Besides, the output may reduce further to 5.8 million per barrel from January 2021 to April 2022.
On the other hand, U.S. President Donald Trump said on his twitter account, “Great deal for all, which will save hundreds of thousands of energy jobs in the United States. The energy industry will be strong again.” Besides, the investors have remained that cut came too late to prevent an oversupply as the Coronavirus pandemic continues to harm the global economy.
Oil Technical Analysis – Can Bulls Regain Momentum This Time?
WTI nose dive after the price rejected $27.50 resistance area, and currently, Oil price consolidating above $22 intraday support level. The current price action is quite volatile may sustain further in the days ahead.
Image: Oil 4 Hour Chart
According to the 4-hour chart, WTI is currently trading at $22.60 area and Oil price consolidating. The price is struggling between the ranges of $27.50 – $20 from an extended period. As per the current price action context, if the price can have a 4-hour impulsive close above the dynamic level, the bulls may recover higher towards $27.50 area. Alternatively, if the price breaks below $22 area with an impulsive close, the bearish pressure may sustain towards $20 in the coming days.
Furthermore, the dynamic level is currently residing above the price, which may act as a strong resistance. In contrast, a break above the dynamic level may lead the price upward towards our expected target area. Besides, the Stochastic Oscillator lines are residing above the oversold level 20, which may have a bullish cross over soon.
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WTI Is Still Indecisive Below $27.50 Area
According to the Daily chart, the WTI price is currently very indecisive while residing below $27.50 area. As per the current price action, if the bearish pressure continues and closes below $20 area, the bearish trend may sustain lower towards $15 in the days ahead. In contrast, if the price bounces higher from $22 area, and had a daily close above $27.50, the bulls may continue higher towards $36 in the process.
Image: Oil Daily Chart
Along with the dynamic level of 20 EMA is currently residing above the price, which has worked as a strong resistance earlier and may continue further. So, if the price breaks above the dynamic level, the bulls may regain momentum. Besides, the MACD lines were residing below 0.00 level and had a bullish intersection, which indicates bulls may gain momentum soon.
To conclude, Oil has been struggling since the COVD-19 hit the global economy. Oil did manage to remain above $20 area but still indecisive. A daily impulsive breakout may help to find out the definite trend in the coming days.