Oil prices rose outside the Ichimoku cloud early on Friday and broke above the key psychological level of $50.
The intra-day bias is to the upside as the tenkan-sen lines has made a bullish crossover above the kijun-sen line. Momentum is bullish as the RSI is back above 50.
Prices are approaching close to a key resistance level of 50.50. There would need to be a decisive close above this level for upside momentum to remain. Otherwise a fall back into the cloud would bring the bias back to neutral and back to the range that the market was in since early September to early October.
In the bigger picture, oil prices were in a downtrend since mid-June, falling from 61.78 to 37.74 and the market has retraced only 50% of this downleg. We would need to see at least a 61.8% retracement in order to see signs of a shift in the bias. This 61.8 Fibonacci level lies at 52.58.
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