Oil Struggling to Sustain Bullish Momentum near $50 price area

Oil Struggling to Sustain Bullish Momentum near $50 price area which may the lead price towards $44. Price pushing below $50 will confirm further down move. Let’s check Oil Technical Analysis for more levels and insights.

February 10, 2020 | AtoZMarkets.com Oil has been quite volatile around $50 price area as the Coronavirus impact sustains globally. Though OPEC has been trying to maintain the price momentum by cutting supply but it is not working as expectations.

Oil decline is getting more extended as days pass. During early January 2020, the Oil price was above $70 per barrel and currently due to Coronavirus issue it is residing just above $50. China is the world’s largest Oil importer and due to Coronavirus the demand fell drastically.

OPEC and it’s allies advised Russia to cut the suppply by a further 600,000 barrels per day. The motive of OPEC for this is to sustain a healthy price of Oil in the global market. But Russia is still indecisive and asked for more time to decide. On the other hand, drastic fall in Oil price lead Saudia Arabia to struggle with the global Oil trades. Until Russia decides to follow the advice of OPEC to cut the supply, further weakness in Oil may occur.

Oil pushing lower towards $44 Support

Oil started the week with a Bullish gap which is already filled and price started to push lower. The price did manage to gain certain momentum after the Open today which lead Oil above $50 again.

Oil Struggling to Sustain Bullish Momentum near $50 price area

image: Oil 1 hour chart

According to 1 hour chart, Oil start the day below $50 at $49.80 but managed to push higher. Though the market context is highly volatile but as the price sustains the Bearish pressure it may push lower. The price got confluence from the dynamic level 20 EMA after pushing higher by covering the gap.

As per MACD, the market open with a gap indicated a Bullish Continuous Divergence which already pushed the price higher. Currently the price may head lower towards $49.50 area and further downwards as the Bearish trend sustains in the coming days.

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Oil Struggling with Bullish Momentum Breaking below Major Support

Oil Struggling to Sustain Bullish Momentum near $50 price area

image: Oil Daily chart

According to Oil daily chart, the price already broke below the important support area. The Major Support area between $50.50 to $51.50 is getting retested which may lead the price further downward in the process. Though certain retracement higher was expected but the Bearish trend may continue further.

As the price remains below $51.50 with a daily close, the Bearish pressure may sustain and continue with target towards $44 per barrel price point. If the price manages to continue current Bearish momentum, achieving the target of $44 will be sooner than expected.

To conclude, Oil may push further downward as the price remains below $50.50 area. The Bullish Momentum struggling to sustain above $50 is an indication of strong Bearish bias. 

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