Oil has become indecisive and faced a strong resistance around $41 area. Oil volatility increased as the global demand fell because of the Coronavirus second wave. Will WTI decline further? What are the charts and technical indicators are saying? Read more to find further insights into today’s WTI Technical Analysis.
October 1, 2020, | AtoZ Markets – Oil is currently trading around $39.80 area and trying to push downward. After bouncing from $36 support level, the bulls recovered higher but failed to sustain the bullish momentum above $41.50 area. As per the current price action, XAU may face strong resistance to the dynamic level of 20 EMA in the coming days.
Oil fell on Thursday during the Asian session as rising Covid-19 cases affected the demand outlook, with additional price pressure from an ascent in OPEC supply a month ago. However, losses were capped by fresh prospects after U.S. fiscal stimulus. Moreover, Coronavirus pandemic has infected more than 7.2 million, and it killed more than 206,000 people in the United States alone.
On the other hand, a Reuters overview found, expanding Oil supply from the Organization of the Petroleum Exporting Countries (OPEC) additionally weighed the market, with yield in September up 160,000 barrels for every day (BPD) from August.
Oil Volatility Increased as the Coronavirus Pandemic Impact the Demand
WTI is currently residing near $39.80 area and trying to decline. However, the price is still residing above the Kijun line and the Tenkan line on the intraday chart.
Image: Oil 4 Hour Chart
According to the 4-hour chart, Oil volatility increased and currently residing near $39.80 area. As per the current price action, if the price can have another impulsive bearish candle close below $40 area, the bears may push the price down towards bullish flag support, which is around $38.50 area. So, if the price reaches $38.50 area and bounces higher from the bullish flag support with an impulsive bullish candle close, the bulls may regain momentum and recover higher towards $40 area as a first target. The second target will be $41.50 if the price can break above $40 area in the coming days.
In addition, the dynamic level of 20 EMA is currently residing above the price. It may work as strong resistance in the process. Besides, the Kijun line and the Tenkan line is currently residing below the price. It may work as strong support in the coming days. The bears may sustain the bearish pressure if the price can break below the Kijun line and the Ten kan.
WTI Bears May Decline Towards September’s Low
According to the daily chart, Oil volatility increased and currently trading around $39.80 area. As per the current price action context, if the price can have an impulsive daily bearish candle close below $40 area, the bears may sustain the bearish pressure towards $38.50 as a first target. The second target will be $36 key support area if the price breaks below $38.50 in the days ahead.
Image: Oil Daily Chart
Furthermore, the dynamic level of 20 EMA is currently residing above the price. It may work as strong resistance to push the price further downside. Also, the MACD lines are currently residing below 0.00 level, which indicates that bears are still in the market may decline further.
To conclude, after an extended period of volatility, Oil is currently trying to reject $40 resistance level. A daily close is required to identify the definite momentum in the coming days.