SINGAPORE: Brent oil may test a resistance at $83.04 per barrel, a break above which could lead to a gain into $84.05-$85.68 range.
The surge on Thursday confirms an extension of a wave (c) towards $84.45, its 138.2% projection level.
This wave observes closely another set of projection levels on the uptrend from $69.24.
Strategically, the target of $84.45 would be confirmed when oil breaks $83.04, as the bearish divergence on the hourly MACD is working against a further rise.
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The divergence is generally a leading indicator of a trend reversal. However, there are exceptions that the signal becomes invalid when the market becomes too strong to stop.
It is not very clear how the current divergence ends up.
A break below $81.41 could be a warning of a deep correction.
On the daily chart, oil broke a resistance at $81.57 and a falling trendline.
Signals are favouring a further rise towards $85.17. The break will prove false if oil closes below this level on Friday.
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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