US oil may hover below $92.72

SINGAPORE: US oil faces a resistance at $92.72 per barrel.

It may hover below this level or retrace towards a support at $90.02.

The contract is riding on a wave 5, which may consist of only three waves, instead of five waves. Even though such a structure looks uncommon, it does appear occasionally.

The linear rise from the Feb. 3 low of $86.75 slowed around $92.72. A decent correction could be developing.

A break above $92.72 may lead to a gain to $94.38.

Brent oil faces resistance at $94.20, due for correction

On the daily chart, the upper trendline of an expanding wedge establishes a resistance around $93 as well.

This resistance may trigger a deep drop.

It would be too aggressive to target the lower trendline support of $70, but a fall to $86.30 might be possible if it is driven by a wave iv.

The risk for a deep drop will be increasing while oil approaches the trendline, as such a drop has been missing on the rise from the Dec. 20 low of $66.04.

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