SINGAPORE: Brent oil may drop towards a range of $63.02-$67.75 per barrel in the next quarter, as suggested by its wave pattern and a Fibonacci ratio analysis.
The current downtrend is against a five-wave cycle from the 2020-low of $15.98 to the March-2022 high of $139.13.
The trend is riding on a powerful wave (C), which has travelled below its 100% projection level of $83.63.
Chances are this wave may extend into a wide range of $57.95-$67.75.
The wave (4) of the uptrend ended around $63.02, the 61.8% retracement, which falls within the range and works as a target as well.
The 50% of the retracement of the uptrend from $15.98 established a support at $77.56, which triggered a bounce that seemed to have ended around $83.63.
However, until oil drops below the Dec. 9-low of $75.11, the continuation of the downtrend won’t look very convincing.
The worry is that the bounce may extend.
The current bounce is supposed to be much stronger than the one triggered by the support at $92.09, the 38.2% retracement.
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At least, they should match each other in duration.
Perhaps the downtrend is riding on a fierce wave C, which leaves little room for a decent bounce.
A stabilization of the price around $77.56 might be the very early signal of the bounce to extend towards $83.63 again.
The wave (C) consists of three smaller waves.
The third wave, the wave C, may extend to $58.02, its 100% projection level, which is close to $57.95.
The first part of this wave adopted a typical impulsive wave mode, with the wave 5 having ended at the Nov. 28-low of $80.61.
Such a wave mode guarantees a deep drop over the next few months.
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