SINGAPORE: US oil may retest a resistance at $90.07 per barrel, a break above could open the way towards $91.25.
The contract is presumed to be riding on a wave C, the third wave of a three-wave cycle from $81.20.
Five smaller waves make up the wave C, with the wave v yet to unfold towards $90.07-$91.25 range.
The rise from $85.06 could be at the same time labelled as a wave b, the second of an irregular flat, which suggests a bearish target of $85.06. Immediate resistance is at $89.11, a break above which could lead to a gain into $90.07-$91.25 range.
A break below $88.15 could be followed by a drop to $86.97. A further fall could confirm the formation of the irregular flat. On the daily chart, oil looks undecided below a resistance of $89.20.
US oil may retest support at $85.93
Its attempt to overcome this barrier has been so far unsuccessful.
However, the market shows no sign of resuming its downtrend either.
A close of the price below the Wednesday low of $86.18 on Thursday would send a clear signal of the downtrend continuation, while a break above $89.20 may lead to a gain to $92.80.
A long-term outlook still remains bearish, as both a wave (C) from $123.68 and a wave C from $104.46 look incomplete.
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