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Crude Oil Price Could Slide Again Below $20

Aayush Jindal

Aayush Jindal

Key Highlights

  • Crude oil price failed to surpass $27.00-$28.00 and declined recently against the US dollar.
  • A major bullish trend line with support at $22.80 was breached on the 4-hours chart of XTI/USD.
  • Conversely, gold price extended its rise and traded to a new multi-year high above $1,725.
  • The US Retail Sales could decline nearly 8% in March 2020 (MoM).

Crude Oil Price Technical Analysis

Earlier this month, crude oil price gained bullish momentum above the $25.00 resistance. However, it failed to continue above the $28.80 level and recently started a fresh decline.

Looking at the 4-hours chart of XTI/USD, the price topped near the $28.89 level and traded below the key $25.00 support level. It opened the doors for more losses below the $24.00 support and the 100 simple moving average (red, 4-hours).

More importantly, there was a break below a major bullish trend line with support. The price is now trading well below the 61.8% Fib retracement level of the last major increase from the $18.99 low to $28.89 high.

An immediate support is near the $20.50 and $20.00 levels. If the price fails to stay above the $20.00 support, it could decline further towards $18.90 or $18.50 in the near term.

Conversely, there might be a fresh recovery wave above $22.50. An initial resistance is near the $23.50 level or the 100 SMA. A successful close above the $23.50 level could lead the price towards $25.00 and $25.50.

Looking at major pairs, EUR/USD is stable above the 1.0850 support and pivot level. Moreover, GBP/USD is slowly gaining pace above the 1.2500 resistance area. More importantly, gold price rallied further above $1,700 and traded to a new multi-year high above $1,725 (as discussed in the previous analysis).

Economic Releases to Watch Today

  • US Retail Sales March 2020 (MoM) – Forecast -8.0%, versus -0.5% previous.
  • US Industrial Production March 2020 (MoM) – Forecast -4.0%, versus -0.6% previous.
  • BoC Interest Rate Decision – Forecast 0.25%, versus 0.25% previous.