SINGAPORE: US oil may test a support at $88.45 per barrel, a break below which may trigger a drop to $87.04.
The rise from $85.73 has been observing a set of its own projection levels and a set of retracements on the fall from $104.39.
The contract failed twice to break a resistance at $91.87.
The failures were followed by deep corrections.
This behaviour suggests an exhaustion of the rise. After breaking a support at $90.13, oil is likely to test the next support at $88.45.
A break above $90.70 could lead to a gain into $91.87-$92.86 range.
On the daily chart, oil found a support at $86.11 which may have triggered a decent bounce towards $94.98-$100.46 range.
The bullish divergence on the daily MACD suggests a further gain as well.
However, the bounce seems to have lost its momentum around a resistance at $91.22.
The contract is expected to either hover below $91.22 for one or two days or retrace towards $86.11.
Trending signals will become clearer when oil gets out of the range of $86.11-$91.22.
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