SINGAPORE: US oil may retest a support at $85.73 per barrel, a break below which could trigger a drop to $83.50.
The downtrend looks steady within a falling channel.
It may extend into a range of $81.26-$83.50, as suggested by the channel and a projection analysis.
The current bounce will not be considered as reversal signal until oil breaks above $90.72.
Immediate resistance is at $89.34, a break above which could lead to a gain into $90.72-$91.84 range.
US oil may retest support at $85.73
On the daily chart, oil broke a support of $87.83.
It was supposed to fall towards $79.09-$83.92 range. However, it managed to hover around $87.83.
This could be due to a lower support of $86.11, the 100% projection level of a wave (C) from $123.68.
The longer oil hovers around $87.83, the more likely the wave (C) has ended at the August 16 low of $85.73.
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