US oil futures have been stuck in sideways movement since the January low despite the increased volatility. Prices look set to enter the Ichimoku cloud following the recent consolidation in a possible sign of the current neutral pattern extending into the near term.
The 50-day moving average has been capping prices for the past week. A break above 35 is needed to take prices decisively above the 50-DMA and the January 28 high of 34.79. This would help shift the bias towards a bullish one and pull the MACD into positive territory. The MACD has been stuck in negative territory since November 2015 and has only just started approaching zero. RSI is also hovering near neutral ground, suggesting prices may struggle for fresh upside momentum.
To the downside, support comes at 31 – a previous support level. If prices are unable to hold above this level, it would open the way for the January 20 low of 27.54, increasing the bearish bias.
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