Oil Price Dropped as Coronavirus New Cases Raise Concerns


Oil price sustains below $38 area and becomes quite volatile and corrective. Oil price dropped as Coronavirus pandemic’s new cases raise concerns among the investors. Will WTI decline further? What are the charts and technical indicators are saying? Read more to find further insights into today’s WTI Technical Analysis.

June 18, 2020, | AtoZ Markets – Oil is currently trading around $37.80 area and trying to climb higher. After breaking above $38 area, the bears pushed the price down again on the daily chart. As per the current scenario, the price found support on the dynamic level of 20 EMA on the daily chart. Its time see that the price will strike higher or decline further.

WTI price dropped more than 1% today during the Asian session as the new Coronavirus cases raised in China and the United States. Investors are worried about Oil demand may fall again as lockdowns are extending. Besides, Lachlan Shaw, Head of Commodity Research at National Australia Bank, said in a statement, “People are concerned about the coronavirus resurging in China and crude stockpiles rising.”

Oil Price Dropped as Investors Are Worried About Lockdown Extends

WTI is currently residing near $37.80 area and trying to recover higher. The price also broke above the Kumo cloud on the 4-hour chart, but the nearest $38 level may act as strong resistance as before.

Oil Price Dropped

Image: Oil 4 Hour Chart

According to the 4-hour chart, Oil price is currently residing near $37.80 area and trying to push higher. As per the current price action, if the price can break above $38 area with an impulsive bullish close, the bulls may recover higher towards $40 area in the coming days. Alternatively, if the price rejects $38 area and has a bearish close, the bears may push the price down towards $35 area again.

Moreover, the dynamic level of 20 EMA is currently residing below the price, along with the Kijun line. The dynamic level may act as a strong support to push the price higher. In contrast, if the price breaks below the dynamic level, the bears may regain momentum and decline further.

WTI Bulls Are Still Optimistic

According to the daily chart, Oil price dropped below $38 area, but still holding the bullish bias above the dynamic level. As per the current price action, the bulls may push the price higher towards $40 area in the process.

Oil Price Dropped

Image: Oil Daily Chart

So, if the price reaches $40 area and breaks with a daily bullish candle, the bulls may recover further towards $45 area in the coming days. Alternatively, if the price rejects $40 area and has a bearish close, the bears may regain momentum and decline towards $35 area again in the days ahead.

In addition, the dynamic level of 20 EMA is currently residing below the price, which may act as a strong support to push the price higher. Besides, the MACD lines are residing above the price, which indicates that the bulls are still holding the bias may strike higher.

To conclude, as the Coronavirus pandemic is spreading again across the world, there is a high chance that lockdown may extend. A daily close is required to find the definite momentum in the coming days. 

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