Oil Retraced Lower towards $51.50 may Bounce higher towards $53 in the coming days. Despite strong Bearish pressure, price managed to bounce from $51.50. Let’s check Oil Technical Analysis for more levels and insights.
February 18, 2020 | AtoZMarkets.com – Oil is currently residing at the edge of $51.50 after certain bounce from the exact level. As per our previous expectation, Oil managed to regain Bullish pressure upon reaching the $51.50 as support. As per preceeding trend, further upward pressure may occur in the coming days.
Coronavirus is still pressurizing Oil prices as the demand for Oil has declined significantly. OPEC+ already trying to fight the declining demand with massive supply cut. It may be deeper in March if price does not bounce back. Though there are certain news of antidote of Coronavirus but still there is no signficant impact seen in the process.
Last week, International Energy Agency (IEA) stated that Oil Demand has fallen by 435,000 barrels per day since January. If demand does not incline then further supply cut may occur. As per OPEC+ agreement, there are chances of 1.7 million barrel per day supply cuts until end of March if situation do not develop.
Oil Retraced Lower but Bullish Bias is still Active
Oil has been quite volatile with the recent price action at the edge of $52 area from where it pushed lower towards $51.50 area. The overall trend is still bullish as per recent price action but there might be further corrections along the way.
image: Oil 1 Hour chart
According to 1 hour chart, the price is currently residing inside the dynamic support area of Kumo cloud. As Oil Retraced Lower since the price rejected Bulls around $52 area and currently found support horizontally and dynamically. As Oil’s Support at $51.50 holds, further upward pressure may be seen.
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Oil Bulls still indecisive
Though the dynamic levels like 20 EMA, Tenkan and Kijun line is residing above the current price area, Kumo Cloud along with Horizontal line is holding the price as support. As per Coronavirus issue, Oil may fluctuate and may show certain spikes along the way but as per preceding trend, there are higher chance of pushing higher towards $53 in the coming days.
On the other hand, MACD lines residing at the edge of 0.00 level indicating Bullish pressure present in the market. Despite the increasing Bearish Histogram size in MACD below 0.00 level, Bullish Divergence is in the making. As the MACD lines remains above 0.00 level, further upward pressure may occur along the way.
To conclude, Oil is residing at the edge of dynamic and horizontal support level from where it can shoot higher. A break below $51.50 with a daily close may negate the current Bullish bias present in the market.