Brent oil biased to fall to $99.46

Brent oil is biased to break a support at $101.38 per barrel and fall to $99.46.

The bounce from the July 21 low of $101.50 has created a neutral range from this level to $105.68. Trending signals are mixed and will become clear when oil gets out of this range.

The consolidation in the range looks a bit confusing, which could be due to the pause of the fall from the July 19 high of $107.61 or the formation of a bottom before an extension of the uptrend from $94.50.

Two observations suggest a downside bias. One is that the downtrend from $120.41 is yet to fulfil its target of $91.03, while the other is that an inverted head-and-shoulders could be developing.

Brent oil may revisit Thursday low of $101.50

The right shoulder is expected to be roughly symmetrical to the left shoulder. On the daily chart, oil has broken a support at $104.41.

It may fall towards the next support at $99.51. A downward wave (C) looks incomplete, which may eventually travel to $83.63.