Technical Analysis

Oil extends gains, up by over 8% today

Oil continues to climb after a record-breaking day yesterday

ForexLive

The jump today could in part be due to dollar weakness as well but oil is finding some reprieve after a dramatic fall on Tuesday towards the $20 level.

Prices jumped by over 20% overnight – but in dollar terms, it was only over $4 – and price is up by another 8% today ($2 in dollar terms) as the bounce continues.

From a technical perspective, oil is looking to find some steadier footing as price now inches back above the 100-hour MA (red line), a level that limited overnight gains.

The next key level will be to look towards a test of the 200-hour MA (blue line) to see if buyers can build any momentum to chase a move back above $30.

Fundamentally though, oil still has to contend with the Russia-Saudi feud and continued global slowdown as a result of lockdowns across the world due to the coronavirus outbreak. That should limit gains and see oil struggle to keep solid momentum well above $30.

But from a valuation perspective, you can expect some bargain hunters in the $20 region – for now at least, until the next key development hits the market.

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