Oil Struggle Pushing Higher above $51.50 Resistance Area may break higher as the pressure continues. Oil may reach $53, if break is successful. Let’s check out Oil Technical Analysis for more levels and insights.
February 14, 2020 | AtoZMarkets.com – Oil is currently struggling at the edge of $51.50 while trying to break above it. The price has been quite volatile since Oil bounced above $50.50 area. As Oil Supply and Demand is coming into an equilibrium price, growth in Oil price may extend further.
Despite the increase of Coronavirus cases and deaths in China, Oil managed to gain certain momentum. Though the price is still quite volatile but certain Bullish momentum can build in the coming days.
Oil prices already plunged by 20% as Supply cut is in the process as Demand declined due to Virus issue. The Organization of the Petroleum Exporting Countries (OPEC) and OPEC+ is looking forward to cut Oil production by 2.3 million bpd. As the demand declined, to keep the price stable, such supply cut will help Oil price to gain further momentum in the coming days.
Oil Struggling Pushing Higher may Correct further
Oil is currently residing at the edge of $51.50 area from where certain Bearish momentum is seen. The price is quite volatile and corrective which may push lower before any strong Bullish pressure is seen.
image: Oil 1 Hour Chart
According to 1 hour chart, the price is currently pushing lower after rejecting the $51.50 resistance area. As the price reached $51.50 area, it is forming Double Top formation. Moreover, MACD Histogram and MACD lines are showing Bearish Regular Divergence along the way. The Chikou Span (Green Line) is still indecisive as it resides inside the candle formation whereas a break above $51.50 in Oil will lead to confluence.
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Oil may Retrace while Bullish Bias is Strong
The price heading lower currently may result as Retracement rather than a full reversal. The price may find strong dynamic support at Kumo Cloud from where it may push higher towards $53 again. As per recent Bullish trend, the price has greater probability to push higher but for that a daily close above $51.50 is required.
To conclude, Oil may retrace lower as per current Bearish pressure but the Bias is still Bullish. Despite certain Bearish confluence in place, as the price remains above $50.50, further upside pressure may be seen in the coming days.