SINGAPORE: US oil is biased to retest a support at $82.42 per barrel, a break below may open the way towards $80.02-$81.20.
The bounce from the Monday low of $82.10 seems to be shaped into a wedge, which is by definition a bearish continuation pattern as it appeared after a downtrend.
The pattern will be confirmed when oil breaks $82.42.
It suggests a target of $80.02.
The capricious moves over the past two days also suggest a sudden rise towards $84.63-$85.70 range.
Trending signals may become clearer when oil gets out of the neutral range of $82.42 to $85.70.
On the daily chart, a projection analysis marks a similar neutral range of $81.14 to $85.59.
The recent confusing move tells little of the following direction.
Market seems to be waiting for something. If the interest rate hike did not pull the trigger, there must be something else to stir the market.
Given that oil is riding on a wave C, the bias looks towards the downside, as this wave is yet to fulfil its target of $73.93.