Brent oil is biased to break a support at $82.80 per barrel, and fall towards its Nov. 28 low of $80.61. The bounce from this low adopted a corrective wave mode, which indicates a small chance of its extension above the Tuesday high of $86.
The bounce seems to have ended around a falling trendline.
This failure, along with the deep fall from $86, suggests a continuation of the downtrend.
A retracement analysis reveals a close relation of the bounce to the fall from $89.90.
The bounce is thus classified as a short-lived reaction to the fall, rather than a reversal of the downtrend from $99.56.
Brent oil to retest support at $80.88
It is not very clear if oil would retest the falling trendline.
A break above the resistance at $84.16 could signal its second attempt.
A break above $85.26 could suggest a reversal of the downtrend.
On the daily chart, oil failed to close above $83.63 after briefly piercing below this level.
The hammer forming on Monday failed to work as a bullish reversal signal. The downtrend looks intact.
It may extend towards $77.56, driven by a wave C.
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