March 16, 2020 | AtoZ Markets - Oil sustains above $27.50 area after the market opened today. The Bears are still trying to push the price lower but failed to break below $29.50 area. As per current price action, Oil may recover higher but needs to break above its corrective phase before any definite move can be expected.
The Federal Reserve rate cut and a price war between two big Oil producers Saudi Arabia and Russia failed to support the Oil price. Brent Oil fell $1.13 to $32.72 a barrel, and U.S. crude was at $31.00, down 72 cents after a stumble below $30 on today's Asian session. The U.S. Fed cut the interest rate on Sunday, and this is the second emergency cut off this month. It is expected to ease tension in financial markets in the upcoming weeks.
OCBC Bank said, "Fear remains the crux of the problem here as market players remain unconvinced that monetary policy easing and liquidity injections will solve an essential healthcare crisis." This economic crisis will remain if Coronavirus antidote is not to create earlier.
Oil Sustains Above $29.50 may Fill Up the Gap Soon
The price of Oil is now trading at $31.10 and trying to push higher as Oil sustain above $27.50 area. XTI became very corrective and volatile after the price failed to break above $35 area. The Bulls may push the price higher and fill up the gap in the coming days.
Image: Oil 4 Hour Chart
According to the 4 Hour Chart, the price of Oil is currently residing near $31.10 area after it rejected $29.50. Oil is now in a very corrective and volatile situation after it bounced from $27.50 key support area. As per the current scenario, the price needs to break above $35 area to recover higher and cover the Bearish gap. If Bulls can take the price above $35 area, the Bullish pressure may sustain further with the target of $42 area in the coming days.
Moreover, the MACD lines are rising higher gradually, and the MACD histogram volumes are forming Bullish Convergence with an indication that Bulls may recover higher soon. The dynamic level of 20 EMA is currently residing near the price as Resistance, along with the Kijun line and the Tenkan line. If the price can break above the dynamic levels, it may add some boost to the price to push higher.
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Oil Bears may Decline Further after Retracement
According to the Daily chart, the price of Oil is currently trading at $31.10 area, while it sustained above $27.50. Oil needs to break above $35 area with a daily close to empower Bulls to recover higher. If the Bulls can push the price higher towards $42 resistance area, Bulls can establish themselves for further up move.
Image: Oil Daily Chart
Moreover, the dynamic level of 20 EMA is residing above the current price. It may pull the price higher as Mean Reversion. The MACD lines are below 0.00 level and emerging to form a Bullish cross over in the process. Despite having strong Bearish pressure, price sustaining above $27.50 does indicate the presence of Bulls. On the other hand, $42 can prove to be a strong resistance area along the path higher towards $50.
To conclude, Oil Bears are currently dominating the market but failed to break below $27.50 area. Bulls may remain active and may push the price higher to fill up the Bearish gap as Oil remains above $27.50 area with a daily close.