SINGAPORE: US oil may test a resistance at $89.17 per barrel, a break above which could lead to a gain into $90.01-$91.05 range.
The bounce from the Sept. 1 low of $85.98 consists of three waves.
The current wave c is expected to travel into a range of $90.01-$91.05.
However, this wave could also be weaker than expected, to end around $89.17.
Be it strong or weak, the wave c is likely to be followed by a continuation of the downtrend.
US oil may test resistance at $88.33
A break below $87.29, especially a further slide below $86.60, could confirm the resumption of the downtrend towards $84.57-$85.61 range.
On the daily chart, oil found a strong support zone of $86.11-$85.59.
An inverted hammer on Sept. 2 suggests a reversal of the downtrend from the August 30 high of $97.66.
It must be noted that the whole downtrend from $123.68 remains steady.
The current rise is classified as a part of the consolidation from the August 16 low of $85.73.
The downtrend may resume upon the completion of bounce in $90.15-$92.88 range.
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