SINGAPORE: US oil may retest a support at $77.37 per barrel, a break below which could open the way towards $76.16. The drop on Tuesday looks deep enough to confirm a reversal of the uptrend from $72.25. It is classified as a continuation of the downtrend from $82.48.
The fall observers a set of a retracements on the downtrend. The first round of the fall seems to have ended around $77.37. The second round may extend below this level.
The bearish outlook has to be reviewed once oil breaks $79.61.
The break could lead to a gain into $80.07-$81.09 range. On the daily chart, two dojis forming on Monday and Tuesday represent a weakness of the market. Oil is likely to fall below $77.24.
Brent oil may retest support of $84.03
A close below this level on Wednesday would suggest a further drop towards $71.76 on Thursday. A break above $80.62 may lead to a gain to $83.48.
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