SINGAPORE: US oil may retest a resistance at $81.92 per barrel, a break above which could lead to a gain into the $83.02-$83.07 range.
The current consolidation seems to be shaped into a rising wedge, which looks more like a top pattern than a continuation pattern, as the rise from $66.82 could be too sharp to sustain.
Even though a projection analysis on the uptrend from $66.82 reveals a target of $84.80, the consolidation around the zone of $80.62-$80.94 may take some time to complete.
A break below $80.14 could be followed by a drop into the $78.14-$79.04 range.
On the daily chart, two spinning tops formed on Monday and Tuesday, around a resistance at $80.62.
US oil may test support at $79.04
The pattern symbolizes cautious market sentiment that does not support a further gain to $83.48.
A consolidation around $80.62 or a drop towards $77.24 becomes increasingly possible.
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