SINGAPORE: US oil is expected to retrace further to $81.70 per barrel and then rise towards $82.89 as indicated by its wave pattern and a Fibonacci retracement analysis.
The sharp gain from the Oct. 16 low of $79.78 was driven by a wave (4), the fourth wave of a five-wave cycle that developed from the Sept. 30 high of $94.90.
This wave will consist of three waves, so far, only the first wave labelled a has completed around resistance at $84.81, the 38.2 percent Fibonacci retracement on the fall from the Oct. 1 high of $92.96 to $79.78.
The second wave, the wave b, is half-completed, and may extend to $81.70, the 14.6 percent level. This wave will be either partially or fully reversed by an upward wave c, which could travel to $82.89, the 23.6 percent level, or to $84.81.
** Wang Tao is a Reuters market analyst for commodities and energy technicals. The views expressed are his own.
No information in this analysis should be considered as being business, financial or legal advice. Each reader should consult his or her own professional or other advisers for business, financial or legal advice regarding the products mentioned in the analyse.
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