At the starting of Monday’s Asian session, WTI crude oil prices dropped despite the struggles of the global central banks and governments in order to control the coronavirus outbreak. US Crude Oil WTI futures were down 2.7% to $31.24 by 2:00 AM ET (06:00 GMT).

During the weekend, the US Federal Reserve announced a massive emergency move by cutting rates to near zero as well as launching a new quantitative program to control the impact of coronavirus. As per the Fed President’s comment, markets are trying to understand what’s going on in the global market, they’re trying to reach a prospect in high uncertainty, and that’s why you see much volatility. He also added, “I think there’s more risk to financial stability in a period like that.”

Meanwhile, New Zealand’s central bank cut rates by 75 basis points on Monday. The Bank of Japan is also reportedly deciding to release more easing policies when they meet later this week.

It’s worth mentioning that WTI crude oil prices have come under strong pressure on both demand and supply sides. Worries about the coronavirus pandemic decreasing oil buying continually, while oversupply fears have grown after top exporter Saudi Arabia raised output and dropped prices to increase sales to Asia and Europe. As we already mentioned, WTI crude oil markets were down by a quarter last week, which was the largest drop since 2008. A potential price war between Russia and Saudi Arabia and worsening coronavirus situation globally continue to weigh on the oil prices.

Whereas the US oil drilling rig count rose for the second week in a row to its highest since December despite the strong drop in both oil and natural gas prices last week.

Daily Support and Resistance
S1 26.84
S2 29.16
S3 30.25
Pivot Point 31.49
R1 32.57
R2 33.81
R3 36.13

The technical side of crude oil is heavily bearish, falling from $46.16 to $27 and then recovering to trade at $35. For now, WTI crude oil is likely to maintain the same pace. Overall, the RSI is extremely oversold, and chances of a bullish correction remain strong. WTI can retrace back until 38.2% Fibonacci retracement to 35.50. We can consider taking another sell position below 35 with a target of 29.70.

Good luck!