Oil price has been volatile from the past several weeks because of the ongoing price war. Oil price declined sharply as OPEC and its allies agree to cut output, now what next? What are the charts and technical indicators are saying? Read more to find further insights into today’s Oil Technical Analysis.
April 10, 2020 | AtoZ Markets – Oil is currently trading around $23 area and trying to push lower. Moreover, OPEC and its allies agreed on Oil output cut by 10 million barrels per day to prevent the Coronavirus pandemic. The current price action is quite impulsive and non-volatile, which may lead to the price lower in the coming days.
Oil price Dropped sharply 9% during the Asian session, which rose 12% in early trade. OPEC+ agreed to a 10 million barrel per day output cut by June, which is still going to cover only a third of the demand. Moreover, according to The Wall Street Journal report, “Riyadh will cut 3.3 million BPD, and Russia will cut 2 million BPD.” Besides, West Texas Intermediate is down $1.84, or 7.3%, at $23 by 12 pm (GMT), and Brent Crude fell 96 cents, or 2.9%, at $31.88.
Will Oil Price Reach $20 Key Level Again?
WTI is currently residing near $23 area after the Oil price declined. Oil tried several times to break above $28 area but failed to sustain further. The current price action is quite non-volatile may continue further lower in the days ahead.
Image: Oil 4 Hour Chart
According to the 4-hour chart, WTI is currently trading around $23 area after breaking below the dynamic levels. Moreover, the price has also broken below the Kumo could, which indicates further bearish pressure may occur in the process. As per the current price action, if the Oil price continues to decline, the bears may push the price further towards $20 area.
Furthermore, the dynamic level of 20 EMA is residing above the current price, which may act as a strong resistance to push the price lower. The Kijun line and the Tenkan line may work as a confluence of the dynamic level of 20 EMA. Besides, the Stochastic Oscillator lines are residing below the overbought level after having a bearish cross over.
WTI Bears Are Quite Strong to Sustain Further
According to the Daily chart, Oil has been quite volatile and currently struggling between the ranges of $28 – $20 area. The price tried to break above, but the dynamic level holds the price as a strong resistance. As per the current scenario, bears may continue the bearish pressure further towards $20 area in the days ahead. So, if the price reaches $20 area and has a daily close above it, the bulls may regain momentum and push the price higher towards $28 again.
Image: Oil Daily Chart
Moreover, the dynamic level of 20 EMA is residing above the current price, as long as the price below the dynamic level the bias will remain bearish. Besides, the MACD lines are residing below 0.00 level after having a bullish intersection, which may sustain further there in the process.
To Conclude, Oil price fell as OPEC reportedly agreed to 10 million BPD cut amid the COVID-19 pandemic. Oil price declined may continue further towards $20 area as investors are losing hope from this commodity.