WTI crude oil breaks $22.50 support level - Is it going after 20.55?

EagleFX Team EagleFX

The Oil prices halted a three-session rally as worries over declining energy demand lingered. U.S. Nymex crude oil futures shed 7.7% to $22.60 a barrel, and Brent sank 3.8% to $26.34.

One of the big reasons behind such a sell-off is the coronavirus death losses. Particularly in Spain, they officially crossed the China figures and becoming the 2nd-highest in the world. The United States cases crossed China figures of more than 81,000 virus cases and reached on the top of the list.

On the other hand, the U.K. reported the highest single-day rise in the death toll by 103 to 578 yesterday. The health system is falling under the weight of the disease. However, the coronavirus outbreak is not showing any sign of slowing down, increasing level threats around the globe. Consequently, the traders are feeling hesitant to store crude oil as a drop in demand may result in further drops in oil prices.

Support	Pivot Point	Resistance
23.04	23.96	24.8
22.21		25.72
20.45		27.48

Technically, the WTI crude oil is trading at 21.65, breaking below the support level of 22.65, which is now working as a support. Overall, WTI Oil has formed a descending triangle pattern on the 4-hour chart that has the potential to support oil prices at 20.40. Closing of candles below 20.40 may trigger further selling until 17.70 in the coming days. Let's look for selling trades beneath 21.50 today with a target level of 20.40 and stop-loss over 22.

WTI Crude Oil - Trade Setup

Sell Below: 21.50

Take Profit: 20.40

Stop Loss: 22

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Author

EagleFX Team

EagleFX

EagleFX Team is an international group of market analysts with skills in fundamental and technical analysis, applying several methods to assess the state and likelihood of price movements on Forex, Commodities, Indices, Metals and

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