SINGAPORE: US oil is expected to test a support of $78.57 per barrel, a break below which could open the way towards $77.37. The contract failed twice to break a resistance at $80.07.
The failure suggests the formation of a small double-top around this level. The consolidation in the range of $78.57-$80.07 may turn out to be a bullish continuation pattern, if oil breaks $80.07.
Such a break will be followed by a strong surge towards $82.48. On the daily chart, the rise from the Feb. 6 low of $72.25 looks tricky.
It could be categorised as either a continuation of the short uptrend from the Dec. 9, 2022 low of $70.08 or a simple bounce against the drop from the Jan. 23 high of $82.64.
Oil prices fall 1pc as US crude inventories swell
The strong bullish momentum suggests a further gain towards $83.48.
A break below $77.24 would be bearish, as it undermines all the achievement by bulls on Feb. 10.
Oil could fall towards $71.76 thereafter.
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