Oil Prices have rallied over 7% in January.

We can see that WTI crude has now broken out of the rangebound channel it found itself in the last few weeks. Currently trading at around $77.94 a barrel, the break higher occurred last Thursday with a follow-through push on the Friday towards the 200-day moving average. The 200MA is clearly now the key resistance here on the daily timeframe, with the price along the moving average reading $78.35. Another attempt of a move higher followed by a close above would in theory suggest bullish price movement, with the potential of another leg higher for oil. However, we can also see another resistance point around $79.60 which most likely will also weigh on the bulls. Towards the downside, support is now initially at today’s low of $77.52 followed by $76.25. A move below $76.25 could lead to a pullback as low as $74.92. Nevertheless, looking at the technical indicators, the MACD is now more bullish than before with the RSI reading 63. However, the RSI has faltered slightly on the rejection along the 200MA.