Oil broke above $41.50 area with an impulsive bullish close yesterday on the New York session. Why Oil price dropped as the United States build bigger than expected inventory? Can Oil recover further? What are the charts and technical indicators are saying? Read more to find further insights into today’s WTI Technical Analysis.
July 22, 2020, | AtoZ Markets – Oil is currently trading around $41.50 area and trying to decline. After retracing from $41.50 support level, Oil had a bullish pin bar close above $41.50 area on the intraday chart. As per the current price action, Oil may retrace down again towards the dynamic level in the coming days.
Oil price dropped on today as industry report demonstrated a greater than expected inventory build in the U.S. At the same time, Coronavirus pandemic cases keep on rising, possibly further imprinting demand in the world’s greatest Oil consumer. Moreover, U.S. President Donald Trump said on his first press conference of the month focusing on the pandemic that the outbreak would likely get worse before it shows signs of improvement, one of his first ongoing affirmations of the spread of the issue.
Oil Price Dropped as COVID-19 Pandemic Cases Rose in the United States
WTI is currently residing near $41.50 area and trying to push downward. After rejecting from $42.50 area, Oil pushed down quite impulsive towards $41.50 area on the intraday chart.
Image: Oil 4 Hour Chart
According to the 4-hour chart, Oil price dropped and currently trading around $41.50 area. As per the current price action, if WTI can break below $41.50 area, the price may retrace down towards the dynamic level of 20 EMA, which is around $41.20 area. So, if the price retraces down and bounces from the dynamic level with a 4-hour bullish candle close, the bulls may recover upside towards $43 resistance level. It should be noted, $41.50 area also may work as strong support in the coming days.
In addition, the dynamic level of 20 EMA is currently residing below the price. Along with the Kijun line and the Tenkan line. The dynamic level may act as a strong support to push the price upward. The Kijun line and the Tenkan line may work as a confluence of the dynamic level.
WTI May Recover Further in the Process
According to the daily chart, Oil price dropped but still holding the bullish bias above the dynamic level of 20 EMA. As per the current price action, if the price can have an impulsive daily bullish close above $41.50 area, the bulls may strike towards $43 area as a first target. The second target will be $45 area if the price can break above $43 area in the coming days.
Image: Oil Daily chart
Furthermore, the dynamic level 20 EMA is currently residing below the price. It may carry the price as strong support in the days ahead. Besides, the MACD lines are currently residing above the 0.00 level, which indicates that bulls are still on the market may surge higher.
To conclude, as COVID-19 pandemic cases rising gradually in the United States, we may see short-term volatility in the Oil price. A daily close is required to identify the definite momentum in the coming days.