SINGAPORE: US oil is expected to test a support at $114.41 per barrel, a break below which may open the way towards $112.22.
The contract is riding on a wave c, which has briefly travelled below its 61.8% projection level of $115.20. Chances are it may extend to $112.50. A trendline rising from $98.20 has been broken.
The break confirmed a reversal of the uptrend from this level. A retracement analysis suggests a target range of $107.93-$110.94.
US oil to test support at $115.86
The bounce triggered by the support at $114.41 may end around the resistance at $116.59. An extension of this bounce may be limited to $117.89.
On the daily chart, a top has formed around a resistance at $121.63.
Either a drop deep as the one from the May 5 high of $111.37 has started, or the big correction from $130.50 has resumed. A rising channel points a target of $111.72.
Once oil falls to this level, the uptrend from $92.93 could hardly extend.
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