SINGAPORE: Brent oil may bounce moderately to $104.17 before resuming its fall towards a range of $97.57 to $99.92 per barrel, as suggested by a retracement analysis.
More than 61.8% of the uptrend from the low of $97.57 has been reversed.
This low is highly likely to be revisited. The drop of the past two days is so deep that it suggests a continuation of the downtrend from the March 7 high of $139.13.
Brent oil may fall further to $101.65
The consolidation from $97.57 has been shaped into a wedge, which has been almost confirmed as a bearish continuation pattern.
Resistance is at $104.17, a break above could signal the extension of the wedge.
A bullish target zone of $106.21 to $108.24 will be established accordingly.
On the daily chart, oil seems to be stuck in a neutral range of $97.57 to $113.45. The current deep fall is expected to pause in the support zone of $97.57 to $100.48.
A bounce may occur in the zone. Trending signals will turn clearer when oil breaks $97.57 or climbs above $113.45.
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