WTI Recovered After Dropping to 18-Year Low – Quick Trade Plan - Forex News by FX Leaders

WTI Recovered After Dropping to 18-Year Low – Quick Trade Plan

Posted Tuesday, March 31, 2020 by
Arslan Butt • 2 min read

WTI crude oil prices recovered after dropping to 18-year lows in the last session. However, oil prices recently got support from the extended recovery in the market risk sentiment. As of writing, WTI crude oil prices are currently trading at 21.19 and consolidating in the range between 20.23 and 21.74.

Whereas the US Crude Oil WTI Futures jumped 4.43% to $20.98. US oil fell approximately 7% to $20.09 a barrel on Monday, its lowest level since February 2002, because oil markets continued to search for a solution to the difficulty of oversupply. From tomorrow, Saudi Arabia and Russia will be able to pump-at-will because the OPEC+ alliance failed to negotiate a truce in the price war between the two producers.

Meanwhile, the US policymakers recently attempted to boost oil prices. US President Donald Trump did not suggest a total lockdown in the country and suggested no to nationwide stay-at-home order, which helped to continue the previous day’s risk-on tone. As a result, the US 10-year treasury yields gained 5-basis points (bps) to 0.72%, and most Asian stocks were flashing green and marked moderate gains by press time.

After multiple deaths all over the world, the latest figures from Italy and Spain declined and showed signs of easing. As per Monday’s figures, Italy recently registered the lowest coronavirus (COVID-19) cases, 4,050, since March 17, while Spain also showed a reduction in the death toll to 812 from 838. However, the virus-related fears are still surrounding the US because cases rose to 140,904 from 122,653 during the same period.

Moving on, Oil traders will now keep their eyes on the weekly private inventory data from the American Petroleum Institute (API), prior -1.25M barrels, while the virus headlines and updates about the Saudi-Russia disagreement over production will be key to watch for taking fresh directions.

Daily Support and Resistance

S1 18.66

S2 20.13

S3 20.95

Pivot Point 21.59

R1 22.42

R2 23.06

R3 24.53

Crude oil has developed a descending triangle, which is holding WTI prices near 21.55 areas. On the 4-hour timeframe, the descending triangle appears to get disrupted. Closing of candles beneath 20.35 region may trigger more selling unto 17.74 level while resistance remains around 21.65. The RSI and Stochastics are recommending selling bias, so we should think of taking selling positions beneath 20.55 and being bullish above the same today. Good luck!

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