SINGAPORE: US oil may retest a support at $81.92 per barrel, a break below which could open the way towards a range of $80.14-$80.89. A wave (5), or its first part, may have completed around a resistance at $83.70.
The contract is expected to drop towards the bottom of the wave (4) around $79.
The bearish divergence on the hourly RSI confirms an exhaustion of the uptrend. This signal generally precedes a decent correction.
Increasing the chance of a fall is a common gap forming on April 3, which will be inevitably covered.
A break above $83.02 could open the way towards $83.70-$84.80 range.
On the daily chart, oil failed to break a resistance at $83.48.
US oil may rise into $84.80-$86.59 range
The failure represents a dissipation of the bullish momentum.
The contract is more likely to fall towards $80.62 than to suddenly break $83.48 and rise towards $86.11.
Strong as it is, the rise from $64.12 might have been driven by a wave (D), which is expected to be reversed by a wave (E) in due course.
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