Oil Pullback may continue Bearish towards $50 support as the price broke below $55 recently. Therefore, Oil having Bearish trend has greater probability to continue pushing lower. Let’s check Oil Technical Analysis for more levels and insights.
January 27, 2020 | AtoZMarkets.com – Oil has been impulsive and non-volatile with the recent Bearish momentum which may lead the price towards $50. After the impact of Coronavirus in China, Oil price pushed lower despite having Libya and Iraq unrest resulting in lower supply.
Oil price declined more 2% as the Coronavirus impact continues in China. Oil market is currently driven by psychological factors and negative expectations. Despite current impulsive bearish pressure in the process, global Oil demand is still quite unchanged. As a result, Oil price may surge higher again as things gets in control.
On Friday, Oil price was residing at 3 Months low which added new ground lower today. The market opened with a Gap today, certain Bullish pressure may be observed to cover up the distance. Therefore, the Oil price may push higher as pullback towards $55 again before strong Bearish pressure continues.
Oil to Pullback towards $55
Oil is currently residing below $53 area which showed certain Bearish Rejection at the starting hours of the week. The Bearish trend has been impulsive and non-volatile along the way which may result in further downward pressure.
image: Oil 4 Hour Chart
According to 4 Hour Chart, the price formed Bullish Divergence in MACD while pushing below $55 area. Moreover, the dynamic level like 20 EMA, Tenkan and Kijun line is residing far from the current price line. As the Divergence suggest, price is currently probable of having a pullback towards $55 before continuing to push lower. As per early expectations for Oil, the price may head towards $50 in the coming days.
MACD Histograms are currently showing decreased Bearish pressure resulting in Bullish Continuous Divergence. Though MACD lines are still indecisive and does not show any crossover to confirm the Bullish pressure. So, certain corrections may occur before pushing higher towards $55 area as retracement.
Oil Progress towards $50 may find Support
image: Oil Daily Chart
Oil is currently heading towards $50 support area quite impulsively. The price may retrace higher towards $55 but the destination is $50 in the coming days. Despite having strong Bearish trend in place, the price may find strong support at $50. As per previous price action at the support area, it is quite certain that the price may push higher above $55 in future. Though the price will be not straight forward, certain corrections and increased volatility may occur along the way.
The dynamic level 20 EMA is residing above $57 which may lead to certain Mean Reversion resulting in Oil pullback. As per Daily chart, the price has greater probability to bounce higher as it reach support at $50 in the coming days.
To Conclude, Oil is highly probable to reach $50 in the coming days with certain corrections along the way. But, certain Bullish intervention may be seen as the price reaches $50 which might lead the price higher again.