SINGAPORE: US oil may retest a support at $59.38 per barrel, a break below which could cause a fall into $58.37-$58.88 range.

The drop from the Tuesday high of $60.95 is much deeper than expected. It makes the steep rise from the Feb. 12 low of $57.41 look like the final thrust of the rally.

This rise may have been driven by a wave (5), the fifth wave of a five-wave cycle from the Jan. 22 low of $51.44, instead of a very powerful wave (3)-3.

A fall below $59.38 could confirm a reversal of the uptrend.

The bottom of the wave (4) at $57.41 will be targeted accordingly.

On the daily chart, a doji formed on Tuesday around a resistance at $60.73. It represents a failure of oil to escape from a rising channel. Probably, the contract would retrace towards $57.72.

A break above $60.73 may confirm the continuation of the uptrend towards $65.65.

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