SINGAPORE: US oil may test a support at $106.10 per barrel, a break below that could open the way towards $103.45.
The drop from the June 29 high of $114.05 is classified as a continuation of the downtrend from the June 14 high of $123.68.
The drop adopted a five-wave mode, which suggests a very limited bounce from the July 1 low of $104.56.
Indeed, the bounce may have completed around a resistance at $109.27.
Brent oil may retest support at $113.97
Oil is poised to fall towards $104.56 again.
A break above $109.27 may lead to a gain into $110.39-$112.03 range.
On the daily chart, oil is riding on a wave (C) which is expected to travel to $100.46 or a much lower level of $86.11.
The white candlestick on July 1 looks not big enough to form a reversal signal together with the preceding black candle.
Most likely, the wave (C) would continue soon.
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