Testing the 49-month, will it continue?

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Crude Oil analysis – 18 March 2020

By: Ahura Chalki

Earlier in the Asian season, WTI tested its 49-month low at $26.26 and then, a recovery above $27.50, however, it did not take long and bears got the control of the markets, once again. Black Gold is trading in the same direction of Stock markets these days and losing the value, as market and investors as well, disappointing much more, day after a day, with more Covid-19 cases in more countries and more travel bans, which brings fewer travels.

On the other hand, now the number of factories, which are closing for unknow period is growing, especially in Europe.

In the US, more cities and states are going to be lockdown , which brings again lower business, lower trades and quieter moves in the economy.

Earlier today, as Reuters reported, Goldman Sachs Research economists have cut their 2020 global GDP growth forecast to 1.25%, implying a recession worse than the one seen in 1991 and 2001 and less severe than in 1981-82 and 2008-09.

The investment bank now sees the US economy contracting by 5% in the second quarter and has slashed China’s first-quarter estimate to -9% year-on-year from +2.5% previously. (FxStreet)

WTI technical analysis:

Technically, WTI is in the clear downtrend and has been breached all supports, the market volume is low and it is not in the oversold area, all technical indicators supporting the bears.

Pivot point: 27.98

Resistance levels: 28.98 / 31.50

Support levels: 25.42 / 24.43

Today, the expected trading range is between 25.42 support and 28.98 resistance.


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