SINGAPORE: US oil may bounce moderately to $87.05 per barrel, before retesting a support at $85.79. The current drop from $89.09 seems to be observing two sets of retracements, respectively on the uptrend from $77.61 and the longer trend of $75.11.
The bearish momentum looks temporarily dissipated around a support at $85.79. The nature of the drop, however, remains unknown.
It could be against the trend from $75.11 or the trend from $77.61.
In either case, oil may fall into a range of $83.75-$84.70.
Therefore, the current bounce could end in the narrow range of $87.05-$87.41. A break below $85.79 could open the way towards $84.70.
On the daily chart, the current rise from the Dec. 9, 2022 low of $75.11 is classified as bounce against a wave (C) from $123.68.
A projection analysis suggests a target zone of $57.95-$67.75.
The drop on Tuesday is considered as the very early signal of the resumption of the wave (C).