SINGAPORE: US oil may end its bounce below a resistance at $111.46 per barrel, and resume its fall towards $104.83.
The current fall seems to be against the uptrend from $98.20.
The preceding two corrections from the April 18 high of $109.81 and the May 5 high of $111.37 were pretty deep, each retracing about 86.4% of the corresponding uptrend.
Based on this relation, it might be possible for the current correction to extend to $100.56, as pointed by a rising trendline.
US oil may fall into $108.18-$109.86 range
A realistic target will be $104.83, the 61.8% retracement of the uptrend from $98.20.
A break above $111.46 may lead to a gain into $113.03-$115.56 range.
On the daily chart, oil failed to break a key resistance at $116.38, the 61.8% retracement of the downtrend from $130.50 to $93.53.
There are two interpretations of this failure. One is bullish that oil may retrace towards $102.25 but still remain within a rising channel.
The other indicates a continuation of the downtrend from $130.50.
Both interpretations suggest a further fall towards $102.25.
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