US oil may fall into $108.18-$109.86 range

SINGAPORE: US oil may fall into a range of $108.18-$109.86 per barrel, due to the reversal of an uptrend from $98.20.

The reversal is confirmed by the drop on Tuesday and the five-wave structure of the uptrend.

The drop would consist of three waves.

The wave c is unfolding towards the target zone. From the April 11 low of $92.93, each time the rise was over, the following correction was very deep.

If this pattern is to repeat, the current correction could extend to $102, as pointed by a rising trendline.

Resistance is at $114.62, a break above which may lead to a gain into $116.14-$118.61 range.

On the daily chart, a retracement analysis on the fall from $130.50 reveals a key resistance at $116.38.

A break above the resistance will be a milestone to bulls, as the break will increase the chance of the price to revisit $130.50.

US oil may test resistance at $107.02

However, oil seems to have lost its momentum before reaching this strong barrier, as revealed by the black spinning top on Tuesday.

The contract may retrace towards $107.65 or at least hover below $116.38 for a few days.