SINGAPORE: US oil is expected to retest support at $79.95 per barrel, with a good chance of breaking below this level and falling more towards $77.60.
Wave pattern indicates oil is riding on a powerful wave C, the third wave of a three-wave cycle that developed from the June 20 high of $107.73. Support is at the 86.4 percent Fibonacci projection level of this wave, temporarily holding it from traveling towards the 100 percent level at $77.60.
A further rebound from the current level may be limited to $81.68, the 76.4 percent level. Strategically, a drop to $79.50 could confirm a break below $79.95.
The views expressed are his own.
No information in this analysis should be considered as being business, financial or legal advice.
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