Oil price has broken above an important trend line resistance and above the Daily Kumo (cloud), but price is now pulling back. Was this a fake break out? If the break out was real we should soon see price reverse to the upside and break above 58.80$ for a move above 61-62$…if this was a false break out we should see Oil towards low 50’s.
Oil price is back testing the Kumo (cloud) at 55.90-55.60$ area. Holding above the cloud is very important for bulls. Pushing above 56.90$ is critical for the short-term trend as this would increase chances of moving above 59$. On the other hand a false break out combined with price breaking below the Daily Kumo would be a sign of weakness. A daily close above 58$ would be a sign of strength. At this point I prefer to be a buyer of OIL as the level that would cancel my bullish view is closer than the level that would cancel my bearish scenario. The risk reward ratio favors the bullish side.
Time will tell….