Oil has become impulsive and non-volatile as Hurricane hits U.S. output. Oil surges higher as US inventory decline significantly. Will bears regain momentum? What are the charts and technical indicators are saying? Read more to find further insights into today’s WTI Technical Analysis.
September 16, 2020, | AtoZ Markets – Oil is currently trading around $39.30 area and trying to recover higher. After bouncing from $36 support level, the price pushed higher impulsively and broke above the dynamic level on the intraday chart. As per the current price action, the price may face strong resistance around $40 area in the coming days.
Oil price up for a second day on today, recovered over 2%, as a hurricane shut U.S. offshore oil and gas supply and an industry data indicated U.S. crude inventories diminished. Moreover, Brent crude (LCOc1) up 85 cents, or 2.1%, to $41.38 a barrel by 06:45 GMT, while the U.S. crude oil (CLc1) climb 92 cents, or 2.4%, to $39.20. The two assets up by over 2% on Tuesday. Besides, Rystad Energy said in a statement, “Our current estimate for the total outage associated with the Sally weather system is between 3 million and 6 million barrels of oil over approximately 11 days.”
Oil Surges Higher as the U.S. Crude Production Declined
WTI is currently residing near $39.30 area and trying to push upside. The price also broke above the Bollinger Bands upper band, which indicates bulls are quite strong currently.
Image: Oil 4 Hour Chart
According to the 4-hour chart, Oil surges higher and currently trading around $39.30 area. As per the current price action, if the price pushes further higher, the bulls may recover upward towards $40 event level in the days ahead. So, if the price reaches $40 area and rejects, the bears may regain momentum and decline towards $38 area in the process.
In addition, the dynamic level of 20 EMA is currently residing below the price. Along with the Bollinger Bands middle band. So, the dynamic level of 20 EMA may pull the price down as a mean reversion. Besides, the Bollinger bands’ middle band may work as a confluence of the dynamic level in the coming days.
WTI Bearish Trend May Retrace Towards the Dynamic Level
According to the daily chart, Oil surges higher and currently residing near $39.30 area. As per the current price action, if the price reaches $40 psychological resistance level and rejects, the bears may regain momentum and push the price downside towards $38 area as a first target. The second target will be $36 area if the price breaks below $38 area in the days ahead.
Image: Oil Daily Chart
Furthermore, the dynamic level of 20 EMA is currently residing above the price. Along with the Kijun line and the Tenkan line. The dynamic level may act as strong resistance to push the price downside. Besides, the Kijun line and the Tenkan line may work as a confluence of the dynamic level in the process. Also, the MACD lines are still remaining below 0.00 level, which indicates that bears are still trying to hold the bearish bias.
To conclude, after an extended period of impulsive bearish momentum, Oil may be retracing higher. A daily close will help to identify that the WTI will continue the bearish bias or not.