SINGAPORE: US oil may drop into a range of $85.67 to $86.38 per barrel, as a bounce from $82.63 has completed.
The bounce was driven by a wave C, which consists of three waves.
After oil failed to bounce over a resistance at $88.70, the wave C is unlikely to extend towards $89.59 again.
The downtrend from the Oct. 10 high of $93.64 may have resumed.
It is supposed to develop towards $82.63.
A break above $88.70 will confirm an extension of the bounce towards $89.59-$91.02 range.
On the daily chart, oil failed to break a falling trendline.
The failure put bulls in a awkward situation.
To drive the price towards $94.37 seems unrealistic. It could be much easier for them to retreat first.
US oil may retrace into $86.38-$87.27 range
Whether the contract could resume its rise after the retracement will be a future concern.
The immediate focus on how deep the retracement could be.
A deep drop to $83.17 will confirm a continuation of the downtrend from $123.68, while a much shallow one could bring some hope for retesting the trendline.
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