Oil bullish trend is still intact, but the volatility increased extremely. Oil strikes above $40 psychological area. Can bulls recover higher this time? What are the charts and technical indicators are saying? Read more to find further insights into today’s WTI Technical Analysis.
July 16, 2020, | AtoZ Markets – Oil is currently trading around $40.80 area and trying to push down. The price faced resistance around $41 area, which is also an event level. As per the current price action, WTI may retrace down towards the dynamic level of 20 EMA in the coming days.
Oil price rose today during the Asian session after OPEC and its allies, including Russia agreed on production cut, which will start from August. In spite of the fact that the drop was cushioned by the prospect for the whippy U.S. need get after a major drawdown from the nation’s crude stocks.
Moreover, the Organization of the Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, agreed on Wednesday to downsize Oil supply cuts from August. Because the worldwide economy gradually recovers from the Coronavirus pandemic.
Oil Strikes Above After the OPEC Agreed on Further Supply Cut
Oil is currently residing near $40.80 area and trying to decline. After bouncing from the dynamic level of 20 EMA on the intraday chart, Oil reached around $41 area but failed to sustain further.
Image: Oil 4 Hour Chart
According to the 4-hour chart, Oil strikes above and currently trading around $40.80 area. As per the current price action, the price may retrace down towards the dynamic level in the coming days. So, if the price reaches towards the dynamic level and bounces higher, the bulls may push the price upward towards $42 area in the process. Alternatively, if the price breaks below the dynamic level, the bears may decline towards $40 area again.
In addition, the dynamic level of 20 EMA is currently residing below the price. It may work as strong support to push the price upside. Besides, the Stochastic Oscillator lines are currently residing above the overbought level 80 and had a bearish intersection. It indicates that bears may regain momentum for a while.
WTI Bulls Are Still Optimistic
According to the daily chart, Oil strikes above and currently residing near $40.80 area. As per the current scenario, if the price can have a daily bullish candle close above $41 area, the bulls may recover higher towards $43 area in the coming days. In contrary, if the price can have a daily bearish candle close below $41 area, the bears may push the price down towards $40 area as a first target. The second target will be $39 area if the price breaks below $40 in the coming days.
Image: Oil Daily Chart
Furthermore, the dynamic level of 20 EMA is currently residing below the price. Along with the Kijun line and the Tenkan line. The dynamic level may act as a strong support to push the price upside. The Kijun line and the Tenkan line may work as a confluence of the dynamic level. Besides, the Senkou Span A rose above the Senkou Span B, which is another good indication of bullish continuation. Also, the MACD lines are currently residing above the 0.00 level, which indicates that bulls are still in the market.
To conclude, as the OPEC and its allies agreed on a further output cut, there is a high chance that Oil may recover further. A daily close is required to identify the definite momentum in the process.