SINGAPORE: US oil may test a support at $87.11 per barrel, a break below which may open the way towards $84.88.
The contract is riding on a wave c which may either complete around $87.11 or extend a lot into $81.26-$83.50 range.
A bearish pennant suggests an extension of this wave.
However, the support at $87.11 may trigger a bounce. It is not very clear how this bounce would occur. The bounce may either start above $87.11 or after oil briefly pierces below this level.
A break above $89.34 may lead to a gain into $90.72-$91.84 range.
On the daily chart, the downtrend remains steady within a falling channel.
It is riding on a wave C, which is capable of travelling into a zone of $62.89 to $71.76.
US oil may fall into $86.67-$88.67 range
The support at $86.11 is expected to work together with the one at $87.11 on the hourly chart to trigger a bounce.
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