SINGAPORE: US oil may test a support at $90.72 per barrel, with a good chance of breaking below this level and falling into $87.11-$89.34 range.
An expanding wedge has completed, which is classified as a bearish continuation pattern, to be followed by a drop towards $87.11.
A preceding pennant indicates a lower target zone of $81.26-$83.50.
A break above $91.84 may lead to a gain into $92.96-$94.34 range.
On the daily chart, even though oil climbed above a falling channel, it simply looks doubtful to remain in the new price range defined by the duplicated upper channel.
US oil targets $90.72-$91.84 range
Indeed, the drop on August 12 suggests a false break above the resistance at $91.74.
Only a rise above same day high of $94.81 could suggest an extension of the bounce towards $99.55.
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