SINGAPORE: US oil may test a support at $83.78 per barrel, a break below which could open the way towards $82.09-$82.90 range.
The drop from $88.17 looks so sharp and deep that it could hardly be classified as a pullback towards a falling trendline.
Instead, it looks like a continuation of the downtrend from $93.64.
One thing for sure is the rise from $82.09 is over.
The rise adopted a corrective wave mode, consists of three waves.
US oil may test resistance at $87
The wave b ended around $82.90 which works as a target. Resistance is at $85.44, a break above which could lead to a gain to $86.50.
On the daily chart, oil failed to break a resistance at $87.44.
It may either hover below this level for one or two days or retrace towards $83.17.
The relation of the current move to the fall from $123.68 suggests an extension of the bounce from $76.25. With the much disappointing performance of the wave c, the extension looks a bit doubtful.
A break above $87.44 could lead to a gain towards $94.37 while a break below $83.17 may open the way towards $76.25-$79.57 range.
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