SINGAPORE: US oil may test a support at $62.27 per barrel, a break below which could cause a loss to $61.32.
The support is identified as the 23.6pc projection level of a downward wave -c- from $63.81.
This wave is capable of travelling into the range of $57.30-$59.79.
The fall from the April 23 high of $66.60 followed the reversal of the uptrend from the Dec. 24, 2018 low of $42.36.
A retracement analysis on the uptrend reveals that the fall has been basically controlled by the 7pc, the 14.6pc and the 23.6pc levels.
Following its two failures to break above $63.06, oil is likely to fall towards $60.88.
On the daily chart, oil failed to break a resistance at $64.18, the 7pc projection level of a presumed wave C from $66.60.
This calculation is based on the assumption that the fall from $66.60 is the continuation of the downtrend from the Oct. 3, 2018 high of $76.90.
This fall looks like a ripple before the primary tide arrives.
The analysis is based on delayed data, prediction may be affected. Charts are not available in reports received in email box through "Alert".
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Wang Tao is a Reuters market analyst for commodities and energy technicals.
The views expressed are his own.
No information in this analysis should be considered as being business, financial or legal advice.
Each reader should consult his or her own professional or other advisers for business, financial or legal advice regarding the products mentioned in the analyses.
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