Brent oil may retest support at $62.65
- It may unfold further in the range of $62.65-$64.58 for a few days.
SINGAPORE: Brent oil may retest a support at $62.65 per barrel, a break below which could cause a fall to $61.09.
The bounce triggered by the support may have been driven by a wave B, the second wave of a three-wave cycle from $67.70. This wave is expected to be reversed by a downward wave C.
The drop from $67.70 adopted a five-wave mode, which indicates the development of a zigzag or a short-term five-wave cycle. In either case, oil is likely to fall into $59.53-$61.09 range.
The focus now is on whether the wave B is over. Compared with wave A, this wave B looks too brief and short to complete.
It may unfold further in the range of $62.65-$64.58 for a few days.
Most likely, the wave B would travel towards $62.65 and then reverse its course, towards $64.58. To simplify this scenario: oil may consolidate in the range of $62.65-$64.58 for a few days before dropping deeply.
On the daily chart, a small head-and-shoulders could be developing, which will be confirmed when oil breaks $63.03. The pattern will then suggest a target of $55.50.
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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