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SINGAPORE: US oil may break a support at $78.54 per barrel and fall to $76.63, as suggested by a retracement analysis.

The bearish divergence on the hourly MACD worked effectively while the uptrend is approaching a resistance at $79.99.

The correction triggered by the resistance may last a few days.

Most likely, the correction would extend to $76.63.

Once oil drops to this level, the uptrend from $62.43 will be considered to have reversed.

Despite the strength of rise from $62.43, its corrective-wave structure still casts a big shadow on a bullish view. The rise might have been driven by a wave B, which is expected to be reversed by a downward wave C.

A break above $79.99 could lead to a gain into $81.12-$82.41 range. On the daily chart, a small spinning top formed around $79.99 on Jan. 7.

The pattern represents a hesitation of the market. It also signals a dissipation of the bullish momentum.

A break above $79.99 could lead to a gain to $82.28 while a drop to $76.63 may cause a bearish reversal of the uptrend.

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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