US oil may retest support at $60.58
- However, the uptrend will not be confiremd until oil breaks $63.81.
SINGAPORE: US oil may retest a support at $60.58 per barrel, a break below could cause a fall into the range of $59.30 to $59.82.
The fall from $63.81 adopted a five-wave mode, which suggests the development of a zigzag or a five-wave cycle.
In either case, oil is expected to fall into the range of $57.63 to $59.08, formed by the 50% and the 38.2% retracements on the uptrend from $51.44 to $63.81.
A retracement analysis on the fall from $63.81 to $58.59 reveals a realistic target zone of $59.30-$59.82. Resistance is at $61.82, a break above could lead to a gain to $62.58.
On the daily chart, the right-shoulder of a small head-and-shoulders could be developing. As long as oil remains below $61.70, this pattern is likely to be confirmed.
The confirmation will be when oil breaks $59.41. This pattern suggests a target around $54. A break above $61.70 could open the way towards $63.81.
However, the uptrend will not be confiremd until oil breaks $63.81.
Each reader should consult his or her own professional or other advisers for business, financial or legal advice regarding the products mentioned in the analyses.
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