Oil Rejecting Resistance at $53.50 may Retrace Lower towards $53 before continuing the Bullish trend. The trend has become non-volatile recently. Let’s check Oil Technical Analysis for more levels and insights.
February 20, 2020 | AtoZMarkets – Oil has been quite impressive with the recent Bullish run which lead the price to reside above $53.50. But due to immediate Bearish pressure pushing the price lower lead the price to retrace lower below $53.50 area again. As the Bullish trend is intact, further upward pressure may occur.
Oil price extended quite well recently after clearing out $51.50 resistance area with a daily close. As Demand concern eased a bit, currently less supply is leading the price to climb. According to Analysts, the supply disruptions are helping to reduce the virus impact on the Oil price but worse may be yet to reveal.
Libya issue is currently getting into limelight after the Coronavirus issue. The lack of exports from Libya due to close down of oil fields, may lead the price to certain extent. Though supply cut by OPEC and OPEC+ has good impact on the recent bounce but how long the price may sustain it’s Bullish run is still a question.
Oil Rejecting Resistance may result in only Retrace
Oil has been quite non-volatile with the recent Bullish trend which lead the price to reside at the edge of $53.50 area currently. The price did manage to push above the $53.50 area but could not sustain the momentum.
image: Oil 1 Hour Chart
According to 1 Hour Chart, the price is currently residing at the edge of $53.50 area. Though the Bias is still Bullish and may continue to surge higher but certain retrace towards $53 area may occur.
The dynamic levels like 20 EMA, Tenkan and Kijun line is holding the price higher to reach a potential zone and break above $53.50 will lead the price towards $55 again. On the other hand, MACD Histogram is showing Bearish Continuous Divergence along with a Bearish Crossover. It indicates certain Bearish pressure in the making.
As per current price action, there are higher probability for price to surge higher but certain correction may occur along the way.
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Oil broke above Dynamic Levels
Oil breaking above the dynamic level of 20 EMA in the daily chart is an indication of further upward pressure in the making. After breaking above $53 area, the Bulls confirmed their place in the current market price but still indecisive about further impulsiveness.
image: Oil Daily Chart
The price breaking above the dynamic level did manage to push higher impulsively which somehow confirms the break reliability. But currently the price is indecisive and Kijun line may act as dynamic resistance to the path higher towards $55.
So, despite the current confluence of the Bullish trend in place, certain correction and volatility may be observed. But as the price remains above $53 area with a daily close, further upside pressure may continue.
To conclude, Oil with strong impulsive Bullish pressure may reach $55 area. But certain correction may occur along the way as the price continues it’s journey higher.