SINGAPORE: US oil may test a resistance at $64.64 per barrel, a break above which could lead to a gain to $65.92.

The contract has stabilized around a support at $63.61, the 50% retracement of a five-wave cycle from $59.24. The stabilisation indicates the completion of the correction from $67.98, even though the wave c is much shorter than the wave a.

Such a relation between these two waves is acceptable, given that the previous rally from $59.24 is quite strong. A break below $63.61 could cause a fall to $62.58.

On the daily chart, a wave C from $51.64 is unfolding. It is capable of travelling to $71.93.

The drop from Monday high of $67.98 seems to be due to a resistance at $67.14.

Indeed, the drop could have more to do with a resistance zone of $65.65-$66.60, formed by the Jan. 8, 2020 high and the April 24, 2019 high. The contract is expected to stabilize around $64.18 and retest the resistance zone.

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