SINGAPORE: Brent oil may bounce into a range of $116.44-$117.57, following its stabilization around a support at $111.62 per barrel.
The support is identified as the 100% projection level of a wave C from $121.25.
The strong reaction of the market around this support signals a completion of the wave C.
The current bounce could be as strong as the one from the June 20 low of $111.52, to extend into the zone of $116.44-$117.57, as pointed by a falling channel.
Brent oil may bounce further into $113.89-$115.30 range
Support is at $113.89, a break below which could trigger a drop to $111.62.
On the daily chart, the big drop on June 17 confirmed a reversal of the uptrend from the May 11 low of $101.30 and a continuation of the downtrend from $139.13.
Driven by a wave (C), oil may revisit the low of $96.93 in due course.
A retracement analysis reveals a support at $113.05, which temporarily stopped this wave and triggered a pullback towards a rising trendline.
Most likely, the pullback would end around a resistance at $118.03.
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