SINGAPORE: Brent oil may retrace into $83.76-$84.53 range, as it failed to break a resistance at $86.74 per barrel.

The resistance is identified as the Oct. 3, 2018 high. After a few days of consolidation in the range of $83.76-$85.77, oil still failed to overcome this barrier.

Either the resistance is too strong, or the bullish momentum is too weak.

The bearish divergence on the hourly RSI confirmed a weak momentum.

The pattern from the Oct. 18 high of $86.04 looks like an expanding wedge, which is interpreted as a top pattern. Sometimes, such a wedge may develop into a diamond pattern. Both indicate a subsequent drop.

On the daily chart, oil is struggling around a resistance zone of $85.17-$86.74.

A former target range of $89.63-$92.69 has to be temporarily aborted, due to a bearish divergence on the daily RSI and a dissipation of the bullish momentum.

It is increasingly possible that a decent correction would occur around $86.74, which has been absent on the steep rise from the Sept. 10 low of $70.94.

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