Friday, February 28, 2020 5:53 PM EDT
Crude oil plunged into bear market territory this week as the commodity extended losses beneath support around $50. Falling roughly -35% since its recent high in early January, the growth-linked resource has had its demand outlook pummeled by a global slowdown in shipping, air travel and general economic activity amid the coronavirus outbreak. With economies stumbling and coronavirus cases rising, the outlook for crude remains bleak in the days ahead.
One opportunity for near-term recovery is an upcoming OPEC meeting in which the group may look to reduce production, effectively capping supply in an effort to raise prices. That being said, some members – particularly Russia – have expressed a desire to keep production constant as they see little need to crimp output beyond what the members previously agreed to. While traders await news from the conference, crude will attempt to regain its footing alongside the Dow Jones and other risk assets.
CRUDE OIL PRICE CHART: DAILY TIME FRAME (JUNE 2016 – FEBRUARY 2020)
(Click on image to enlarge)
In pursuit of a bottom, chartists will look to nearby support for assistance in keeping price afloat. To that end, the next major level may reside around the December 2018 low, ranging from $43.08 to $42.44. Beyond that, chart analysis will have to extend to 2016 levels and beyond where subsequent support can be outlined around the $40 level and the August 2016 low at $39.58.
Disclaimer: DailyFX, the free news and research website from IG, is one of the world's leading sources for news and analysis ...
more
Disclaimer: DailyFX, the free news and research website from IG, is one of the world's leading sources for news and analysis on the currency, commodity and index trading community. With nine internationally-based analysts publishing over 30 articles and producing 5 video news updates daily, DailyFX offers in-depth coverage of price action, predictions of likely market moves, and exhaustive interpretations of salient economic and political developments. DailyFX is also home to one of the most powerful economic calendars available on the web, complete with advanced sorting capabilities, detailed descriptions of upcoming events on the economic docket, and projections of how economic report data will impact the markets. Combined with the free charts and live rate updates featured on DailyFX, the DailyFX economic calendar is an invaluable resource for traders who heavily rely on the news for their trading strategies. Additionally, DailyFX serves as a portal to one of the most vibrant online discussion forums in the forex trading community. Avoiding market noise and the irrelevant personal commentary that plague many forex blogs and forums, the DailyFX Forum has established a reputation as being a place where real traders go to talk about serious trading.
Any opinions, news, research, analyses, prices, or other information contained on dailyfx.com are provided as general market commentary and does not constitute investment advice. Dailyfx will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.
less
How did you like this article? Let us know so we can better customize your reading experience.