SINGAPORE: US oil still targets its July 14 low of $90.56 per barrel, as suggested by its wave pattern and a retracement analysis.
The contract is riding on a wave (C) that could travel into $78.21-$83.44 range.
The consolidation above $91.90 has been shaped into a wedge, which has been more or less confirmed as a bearish continuation pattern, suggesting a target of $83.24.
This wedge is a part of a more bearish pennant, which indicates a lower target of $78.21.
The moderate bounce on Tuesday is regarded as a pullback towards the wedge.
US oil may retest resistance at $99.15
Resistance is at $95.87, a break above which may lead to a gain into $97.51-$99.15 range.
On the daily chart, the downtrend remains firm within a falling channel.
It is riding on a wave C, the third wave of a bigger wave (C) from $123.68.
This wave is capable of travelling into a zone of $62.89-$71.76.
A realistic target will be $86.11, which will be valid when oil breaks $91.22.
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