SINGAPORE: US oil may retest a support at $57.88 per barrel, a break below which could cause a fall to $55.50.

The contract has fallen below a higher support at $59.81, the 50% retracement. It is expected to drop further to $57.88.

The current correction is regarded as similar to the one from the Aug. 26, 2020 high of $43.78.

Oil may take a few months to complete the correction and then retest a resistance zone of $65.65-$66.60.

Given that the support at $57.88 held firm on March 23 under a strong attack by bears, it may hold again and trigger a bounce this time.

For the next one or two weeks, oil may be range-bound between $57.88 and $61.74.

On the hourly chart, the contract is expected to retest a support at $58.82, with a good chance of breaking below this level and falling towards $57.25.

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