Oil Bulls Reacted to Bullish Divergence near $20, and the price may climb higher. Oil has successfully able to hold the price above $20 key level. Let’s check Oil Technical Analysis for more levels and insights.
March 20, 2020 | AtoZ Markets – Oil is currently trading at $26.50 area and climbing higher. After a strong Bearish trend in place, the Bulls find support to retrace higher. As per current price action, Bulls are quite strong to sustain the Bullish pressure further in the coming days.
Oil price jumped higher today after the U.S. President Donald Trump said that, he would intervene in the price war between Saudi Arabia and Russia on the right time. U.S. crude and Brent have both collapsed about 40% in just two weeks after the Organization of the Petroleum Exporting Countries and its allies, including Russia increase Oil production and drop the regular selling price.
Moreover, West Texas Intermediate (WTI) rose 43 cents, or 17% at $26.34 a barrel. U.S. crude futures (CLc1) rose 56 cents, or 2% to $25.78 a barrel and the Brent crude futures (LCOc1) down by 3 cents, or 1% to $2844 per barrel. Brent rose more than 14% on Thursday, the biggest one-day gain since 2019.
Oil Bulls Reacted And Pushed the Price Higher
Oil is currently trading at $26.70 area after XTI bounced from $20 support level. The price is presently quite non-volatile and impulsive may continue to recover higher.
Image: Oil 4 Hour Chart
According to the 4-hour chart, the price of Oil is currently residing near $26.70 area and continuously pushing higher. Oil sustained above $20 area after having a Bullish 4-hour engulfing bar. The price already broke above the engulfing bar high to continue further. In this case, if Oil continues to recover higher, the Bulls may take the price higher towards $36 area in the coming days.
Moreover, the price broke above the dynamic level of 20 EMA, along with the Kijun line and Tenkan line. The dynamic level has now turned support for the Oil to support further climb higher. On the other hand, the MACD lines were gradually pushing higher and had a Bullish cross over below 0.00 level. The MACD histogram volumes are showing Bullish Regular Divergence in the process, which is an excellent indication for further Bullish pressure in the coming days.
Oil Bearish Trend May Continue After Retracement
According to the Daily chart, XTI is currently trading at $26.60 area after the Oil sustain above $20 support area. The Bulls can hold the price above $20 area with a daily close. As per the current price action, Bulls are quite strong to push the price higher at least towards $36 area before Oil continue the Bearish trend.
Image: Oil Daily Chart
Moreover, the dynamic level of 20 EMA is residing above the current price. Therefore, it may pull the price higher as Mean Reversion, and the upward move is to be considered as Retracement until the dynamic resistance is broken. The MACD lines are residing below 0.00 level and may have a Bullish cross over in the process. Besides, the Stochastic Oscillator indicator’s lines are at the verge of crossing each other upwards while residing near oversold level 30.
To conclude, after reaching a record low yesterday, Oil managed to have a Daily close above $20 area. Bulls may now retrace higher and may reach $36 area before Oil continue the Bearish trend towards $20 again.