Oil has been quite impressive and consistent with the recent bullish momentum leading the price higher after the historical fall. Oil is currently struggling to break above $20 per barrel, which indicates Bears may still hold their position. Let’s check Oil Technical Analysis for more levels and insights.
May 1, 2020, | AtoZ Markets – WTI regained bullish momentum and sustained it quite well to reach $20 price level. Despite the massive down move below $0 level, such gain does indicate the normalization of the supply and demand in the global economy.
Oil previous gains are currently in an extended form as major oil producers began to cut their output significantly. As of the output cuts of OPEC and OPEC+ members, the imbalance of production and demand is currently set to be halved to 13.6 million barrels per day in May and drop to 6.1 million barrels per day in June.
Oil Struggling to Break Above May Retrace Lower to $16?
The volatility in WTIUSD has been quite impressive, which managed to attract certain investors as the price bounced back from an all-time low recently.
image: Oil 4-hour chart
According to the 4-hour chart, the price did manage to gain certain bullish momentum towards $20, creating a new high. Despite the recent gains in the intraday chart, the volumes seen decrease gradually while MACD is showing a Bearish Divergence formation. The Bulls are struggling to break above $20 which may lead to a certain correction. Though the Bears are already trying to push the price lower, the dynamic level of 20 EMA may hold the price higher.
So, as per the current intraday scenario, the price may retrace towards the dynamic level residing around $16.50 area. As the price remains above $10, the bullish bias may continue further in the coming days.
Oil Has Greater Probability to Push Lower
Oil gained bullish momentum as it bounced higher from $10 recently, and since then, it sustained higher. Though the price is still indecisive around $20 resistance area, the price may consolidate further.
image: Oil Daily Chart
According to the daily chart, the price residing at an important price level of $20. The price did revert to the mean after recent nose dive below $0 area. As per the preceding trend in place, there is a higher chance for the price to continue lower towards $10 again as it remains below $20.
At this point, Bulls may struggle to break above $20, but if they manage to break above with a daily close, $25 will be the first barrier. So, price action near $20 with a daily close is crucial for the upcoming definite trend momentum hint. For now, the bears have a greater probability of continuing to push lower with a target towards $10 in the coming days.
To Conclude, WTI is currently residing near the crucial level of $20 and struggling to break above it. At this point, a break above $20 can indicate further up move. On the other hand, remaining below $20 with daily close may lead to further bearish pressure.