Oil Rejected Resistance at $54.35 and Pushed lower between the price area of $53.00-50. Regardless of Bullish pressure, inevitable correction may take place. Let’s check Oil Technical Analysis for more levels and insights.
February 21, 2020, | AtoZMarkets – Oil has been quite non-volatile and impulsive with the recent Bullish momentum which leads the price to breach above $54 recently. Despite the strength of the Bulls, Bears are currently trying to take over leading to certain counter in the process.
Coronavirus issue has been the most crucial factor for Oil price decline since mid-January 2020. Due to sharp decline in Demand of Oil, OPEC and OPEC+ authorities and members cut supply to certain extent to keep the price stable. As China is the biggest consumer of Oil, such decline in Demand lead Oil suppliers in cut production signficantly to find equilibrium.
Currently, the Coronavirus is reported to spread across the Chinese border, which heightens the fear of global demand decline. Despite having strong caution from WHO, Coronavirus issue is getting bigger day by day and may also impact the global economy significantly soon.
Oil Rejected Resistance and Correcting inside $53.00-50 area
Oil is currently residing inside the price area of $53.00-50 area. After the rejection of the $54.35 area, Bears gained strong momentum which somehow soften the Bullish run in the process.
image: Oil 1 Hour Chart
According to 1-hour chart, the price is currently indecisive. Sudden Bearish intervention from $54.35, which also engulfed the previous price action did lead Bulls to lose specific grounds. The price breaking below $53.50 area did also break below the dynamic levels like 20 EMA, Tenkan and Kijun line, which may act as a confluence for a further down move.
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Kumo Cloud Widening may hold the price Higher
Kumo Cloud is getting broader as support which may hold the price to push higher. Additionally, MACD lines residing above 0.00 may show certain bounce. If the price breaks above $53.50 area again Bulls may jump in. According to our earlier forecast, if Bullish trend sustains, the price may reach $55 area in the coming days.
As per current price action, the market seems to distribute positions of the Bulls and accumulate more momentum to push to higher. If the price remains above $53 area with a daily close, the Bullish bias and strength may remain constant.
To conclude, Oil residing inside the corrective range between $53.00-50 area is an indication of indecision in the market. A break above $53.50 will lead to further upward pressure.