- Strategically, this target will be confirmed when oil breaks $58.55.
SINGAPORE: US oil may test a support at $58.64 per barrel, a break below which could cause a fall into the $56.11-$57.41 range.
The current correction could be due to the completion of a five-wave cycle from $46.16. A retracement analysis suggests a target zone of $54.21-$56.11.
The wave 4 ended at $57.41, which serves as more realistic target.
Oil could have completed a pullback towards a rising trendline and is poised to retest the support at $58.46. A rise to the Feb. 19 high of $60.29 could be extended into the range of $61.13-$62.26.
On the daily chart, a rising channel suggests a further drop to $57.72.
Strategically, this target will be confirmed when oil breaks $58.55.
It is not very clear how the contract behaves around $57.72.
Most likely, it will manage to stabilize and rise towards $62.08.
Even if the whole trend from the Jan. 2 low of $33.64 has reversed, a top may still take some time to form.
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