SINGAPORE: US oil is expected to test a support at $40.92 per barrel, a break below which could cause a loss to the next support at $40.47.
The support is provided by the 138.2 percent Fibonacci projection level of an upward wave 3, the third wave of a five-wave cycle from the April 5 low of $35.24.
This wave was disrupted by a strong resistance at $41.90, the March 22 high.
A further consolidation below this level is highly likely.
A break below $40.92 may not only open the way towards $40.47, the 123.6 percent level, but also cause a further loss to the 100 percent level at $39.75, as suggested by a channel technique.
A rise above $41.64, the 161.8 percent level, could lead to a gain to the 186.4 percent level at $42.39.
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 analyses.
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