Crude oil price started the week below $45 and may likely bounce higher. Oil is currently residing near $46 area and may continue to move higher towards $50.50 again. Let’s check the Oil Technical Analysis for more levels and insight
March 2, 2020, | AtoZ Markets – Oil Bearish pressure pushed lower towards $43.50 last week but did not sustain further. Oil bounced higher and managed to close above $45 support area may continue higher towards $50.50 area in the coming days. Oil broke upward the dynamic level of 20 EMA and residing near $46 area currently.
Crude Oil Price Fundamental Highlights
OPEC has cut Oil production bigger than expected as Coronavirus outbreak is uncontrollable. The global economy is effecting badly after some countries canceled all flights and restricted traveling. The Chinese supply chain cut is a big concern for the world as Coronavirus taking place in Europe, the United States and also in the Middle East. Head of Commodity Research at the National Australia Bank, Lachlan Shaw said, “It’s pretty negative on worldwide Crude Oil and product demand.”
Coronavirus has infected around 85,00 and killed more than 3,000 people around the world. The United States has diagnosed 70 cases, which it’s the first fatality from the virus over the weekend. The Oil price will be in pressure over the year as the Coronavirus takes a toll on the demand and global economy. Oil has dropped nearly 30% from January highs after the virus hit Oil demand in China.
Oil Bounce Higher may Continue Bullish Pressure
The price of Oil broke below the $45 support area last week but failed to sustain. Despite the recent Bearish pressure, the price is currently retracing higher, which may find resistance at $50.50 area.
image: Oil 1-Hour Chart
According to the 1-hour chart, the price is currently residing near $46 area and may continue pushing higher. After rejecting the $45 support area Oil bounce higher and also broke the dynamic level of 20 EMA. The dynamic level of 20 EMA currently residing below the price, along with the Kijun line and the Tenkan line. It may work as a support to push the price higher, but certain retracement expected before Bullish pressure continues.
Moreover, the MACD lines are residing below 0.00 line and gradually sloping higher. It may break above 0.00 line as the price continues higher. The MACD histogram volumes are also residing above 0.00 line and maybe a convergence in the making.
Oil may Retrace Higher Towards $50.50 Resistance Area
According to the daily chart, Oil failed to break the $45 support area and made a close above. After an impulsive and non-volatile Bearish momentum, Oil bounce higher may reach $50.50 as a retracement. If Oil gives a daily close above $45 support area, it may continue higher with the target of $50.50 area in the coming days. Moreover, the dynamic level of 20 EMA is residing near $50.50 area and may pull the price as Mean Reversion. The Kijun line and the Tenkan line may also work as a confluence of the dynamic level of 20 EMA.
image: Oil Daily Chart
On the other hand, the MACD lines are sloping upward and may cross each other in the coming event. But the MACD histogram volumes are residing below the 0.00 line with uncertainty.
To conclude, Oil is residing near $46 area and may continue higher with the target of $50.50. Despite the recent Bearish pressure, an absolute counter from $45 area may lead to particular upward pressure in the process. On the contrary, a break below $45 with a daily close will empower Bears to continue further.