Oil price Dropped below $23 area may decline further. Oil failed to hold the price above $27.50 area and continuously making new record lows. Let's check Oil Technical Analysis for more levels and insights.
March 19, 2020 | AtoZ Markets - Oil is currently trading at $21.75 area and declining further. Oil price dropped below a very important support level of $27.50 area aggressively. As per the current price action, the price may decline further and make new lower lows in the coming days.
Oil price dropped to a record low on yesterday and continue to fall after the Asian session open today. As the Coronavirus impact is unstoppable, the world economy is walking on the path of recession. The ongoing price war between Russia, and Saudi Arabia is one of the main reason for such Oil price decline.
Moreover, the spread of Coronavirus showing no sign of significant reduction. Countries from all over the world are locking down to secure their people. The Coronavirus infected numbers are reached more than 2000,000 people pandemic, killing more than 8,000 people, and the death toll continues.
Oil Price Dropped Record Low Without Any Retracement
Oil is currently trading at $22 area after XTI dropped below $27.50 support zone. The price is presently quite non-volatile and impulsive may continue to drop further. If the price keeps falling, Oil may hit a new record low in the process.
Image: Oil 4 Hour Chart
According to the 4-hour chart, the price of Oil is currently residing near $21.80 after Oil price dropped below $27.50 area. The Bulls failed to hold the price above $27.50 and also unable to fill up the gap. If the price of Oil keep falling, XTI may reach further lower towards $20 to $15 psychological levels.
Moreover, the dynamic level of 20 EMA is residing above the current price, along with the Kijun line and the Tenkan line. The dynamic level of 20 EMA may pull the price higher as a retracement at least towards $27.50 area. The Kijun line and Tenkan line may work as a confluence to the dynamic level 20 EMA. Besides, the MACD indicator lines are residing below 0.00 level from an extended period indicating further downward pressure.
Can Oil Bounce Back From $20?
According to the Daily chart, Oil is currently residing near $22.20 area after the price bounced from $20. The current Bearish trend is very impulsive may sustain further lower. As per the present scenario, Oil should retrace higher at least towards $30 or higher before Bears continue the trend. A Bullish daily bar closes above $20 is required to recover higher.
Image: Oil Daily Chart
On the other hand, the Stochastic Oscillator indicator lines are residing below 20 level and having a Bullish cross over. The MACD lines are residing below 0.00 level with no indication of any Divergence or Bullish pressure.
To Conclude, Oil reaching record low is a worrying sign for the Bulls. As the price remains above $20 area with a daily close, there are certain chances that Bulls may strike back.