Oil price pushed Lower ahead of Oil Strong Bullish Move recently as Libya and Iraq supplies decline confused the market participants. Escalated Protests and Millitary Blockades on two major oil production fields considered to impact the overall momentum. Let’s check Oil Technical Analysis for more levels and insights.
January 21, 2020 | AtoZMarkets.com – Oil recently managed to bounce off the $57.35 area with a daily close. The price did manage to sustain the bullish pressure for a few days but recently certain Bearish pressure took over. Though the Bullish Bias is still quite intact but certain correction along the way may occur.
The disruptions in Libya and Iraq may refuel for the Bulls as the supply detoriates. Despite having certain Bearish presure currently, the price may shoot higher as supply declines. After the pipeline close in two major fields in Libya, national output decreased significantly which may help the buyers regain momentum after retrace along the way. Currently, the supply of Oil from Libya may decrease from 1.2 million barrels per day to only 72,000 barrels per day.
Additionally, Iraq having political unrest added to the Oil supply problem. As the Supply declines in the coming days, further upside price action may occur as Demand remains constant. Recently, Bank of America expects Global Oil Demand to increase by 1.1 million per day during 2020, which if not met could sky rocket the Oil prices in the Global Market. The price of Oil is expected to reach $63.50 in the coming days.
Oil Strong Bullish Move Expectations
Oil pushed lower with a daily close yesterday despite the Bullish expectation. The price recovered the Day Open Gap and currently retesting the $58.35 again. The price is currently testing $58.35 support contained inside the Kumo Cloud support. Currently there is no sign of Bullish Divergence to support the bounce but decrease in Bearish pressure off the level is a clear indication of Bullish presence at the level.
image: Oil 1 Hour Chart
As per Ichimoku perspective, the Tenkan and Kijun line along with 20 EMA is residing above the price. The dynamic levels can act as certain resistance along the way towards $60.00 area. The Chikou Span is currently residing at the price line from where it may bounce higher signalling Bullish momentum. The bullish pressure is still consistent despite certain dips as the fundamentals strongly suggest an upcoming Supply crisis which will eventually increase the price.
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Oil to Head towards $60.00
Oil pushing lower recently confused the market participants. Decrease in confidence of the Bulls are currently reflected in the chart. Though the price pushed lower but $58.35 support area managed to hold the price at certain point. Earlier, $58.35 has been a strong turning point for the Bulls as the break above lead to strong Bullish Rally.
image: Oil Daily Chart
In Daily Chart, certain Bearish pressure is pushing the price lower after rejecting off the dynamic level 20 EMA. Slower MACD line dipped below 0.00 level where the Faster line is still above it. Certain squeeze higher on the MACD histogram is indicating the presence of Bulls but a daily close needs to confirm it. Price retesting $58.35 already increased the probability to support further gains in the coming days.
To Conclude, the Oil price pushed lower retesting $58.35 support area is expected to push higher. It may continue the Bullish run towards $60.00 and higher in the coming days. As the price remains above $58.00 area, it may support further gains.