SINGAPORE: US oil is expected to test a support at $115.86 per barrel, a break below which may open the way towards $111.76-$113.81 range.
The sharp swing of the market from the Tuesday high of $123.68 bears the characteristic of a trend reversal.
Further indication of the reversal is given by the violation of a rising trendline.
Unless oil could unexpectedly rise above $120.13, the trend from $105.13 could have reversed.
US oil to retest resistance at $122.49
A break above $120.13 could lead to a gain to $122.49. On the daily chart, oil failed a few attempts to break $121.63.
A top could be developing around this level.
The fall on Tuesday confirmed a dissipation of the bullish momentum.
There might not be one more attempt to test $121.63. Instead, oil may test the support at $116.15, with a good chance of breaking below it and falling towards $111.72.
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