Oil has become impulsive and non-volatile and broke above $42 resistance level. Oil strike higher after the U.S. crude inventory data confirms a decline in crude stocks. Will WTI surge further? What are the charts and technical indicators are saying? Read more to find further insights into today’s WTI Technical Analysis.
August 6, 2020, | AtoZ Markets – Oil is currently trading around $42.25 and trying to retrace down. After breaking above $42 resistance level, WTI pushed the price higher and reached around $43.50 area. As per the current price action, Oil price may retrace towards the dynamic level of 20 EMA in the coming days.
WTI futures cut gains yet remained upward strongly today after official data indicated U.S. crude inventories saw a huge drop a week ago. However, gasoline stocks suddenly rose. Moreover, West Texas Intermediate crude for September settlement CL.1, +0.37% CLU20, +0.37% stayed up $1.54, or 3.4%, at $43.24 a barrel on the New York Mercantile Exchange. After climbing towards a five-month intraday high at $43.50 suddenly following the data.
On the other hand, OPEC+ agreed to cut supply by 9.7 million barrels every day beginning May, easing to 7.7 million barrels per day in August and going through the year’s end. The nations that surpassed the prior cuts are required to minimize output additionally.
Oil Strikes Higher as OPEC+ Agreed to Cut Output Further
Oil is currently trading around $42.25 area after a retracement from $42 support level. However, the price faced resistance around $43.50 area and created a long rejection daily candle.
Image: Oil 4 Hour Chart
According to the 4-hour chart, Oil strikes higher and currently trading around $41.25 area. As per the current price action, if the price can have a 4-hour bullish candle close above $42 support level, the bulls may recover higher towards $45 area in the coming days. Alternatively, if the price breaks below $42 area with an impulsive bearish candle, the bears may regain momentum and push the price downside towards $40 area in the process.
In addition, 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 strong support to push the price higher. Besides, the Kijun line and the Tenkan line may work as a confluence of the dynamic level in the days ahead.
WTI Bulls Are Still Optimistic
According to the daily chart, Oil strikes higher and had a daily bullish close above $42 area. As per the current scenario, if the price can have a daily bullish close above yesterday’s candle’s close, the bulls may recover higher towards $45 area as a first target. So, if the price can reach $45 area and break above it, the bulls may sustain the bullish trend towards $48 area. In contrary, if the price rejects $45 area, the bears may regain momentum and push the price downside towards $42 again in the days ahead.
Image: Oil Daily Chart
Furthermore, the dynamic level of 20 EMA is currently residing below the price, which may carry the price as support. Along with, the MACD lines are currently residing above 0.00 level and may have a bullish intersection. It indicates that bulls are still present in the markets.
To conclude, after an extended period of volatility, Oil managed to break above $42 area with the support of 20 EMA. A daily close is required to identify the definite momentum in the days ahead.