Oil price rises higher and may continue the Bullish Rally which may lead the price towards $63.50 again. The bounce off the $57.30 area supported the bulls to continue its strong run. Let’s check Oil Technical Analysis for more levels and insights.
January 17, 2020 | AtoZMarkets.com – Oil has been quite impulsive with the Bearish pressure it had after rejecting off the $65.60 area. Despite having strong bearish pressure, the bulls are currently quite impulsive with the recent gains and continue pushing higher.
The main driver of the bulls in Oil is Trade Deal between U.S. and China recently. The Trade Deal of U.S. with China is about exporting Oil to China which will contribute to the global growth. U.S. is also looking forward to Canada and Mexico for the Petroleum export which will boost the Oil prices in the coming days. Despite certain tensions arise relating U.S. and Iran war, Oil is currently strong enough to regain bullish momentum.
According to the deal agreement, China agreed to buy $52.4 Billion worth of energy product by next two years. Though it is a good sign for the Oil buyers but any change in commitment from China may lead to significant change in the market.
Oil Bullish Rally starts again?
Earlier the bullish rally in Oil created a new peak at $65.60 area but could not sustain it due to strong bearish intervention. The price turned quite volatile after reaching the peak and resulted in a strong downturn close below $63.50 area. The Bearish impulsive pressure was quite remarkable but it started to fade away as the price breaks below $60.00 area.
After certain correction and slow progress towards $57.30 area, the price managed to bounce off with strong momentum. The momentum is currently sustained which may help Oil to rise higher and continue the Bullish Rally.
image: Oil 4 Hour Chart
As per 4 Hour chart, the price has managed to break above the corrective area of $58.50. Despite the break certain consolidation is still in place. Recent two 4 hour candles closed inside the strong impulsive bullish bar while supported by the dynamic levels. The price currently have good confluence to push higher along with the dynamic levels but the uncertainty will fade after a close above $59.00.
The Tenkan, Kijun and 20 EMA lines are currently residing below the price level as support. As per our last analysis, the Bullish Divergence is still in place and MACD crossover below 0.00 is confirming the confluence. The Chikou Span (Green Line) is nearing the price line and a break above will indicate Oil to rise higher in the process.
Though the Kumo Cloud is quite thick around $60.00 area, the price may still progress higher towards $63.50. If we go for a split targeting, our First Target would be $60.00 and Second Target would be at $63.50.
To Conclude, Oil may rise higher to continue the Bullish Rally with target towards $63.50 as Bullish Pressure sustains.