SINGAPORE: US oil may retest a support at $63.88 per barrel, as the bounce triggered by this barrier looks like a part of the correction from the May 5 high of $66.76.
Around this high, a double-top formed, which had been confirmed but invalided by the surge on May 14. It still suggests a downside bias.
Until oil breaks a resistance at $66.52, the bearish outlook will remain unchanged. On the daily chart, oil failed to break a strong resistance zone of $65.65-$66.60.
It is undergoing a second correction.
Even though this correction is expected to be much shallower than the one from the March 8 high of $67.98, it looks too shallow to have completed around $64.18. A triangle suggests an extension of the correction towards $61.79.
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