SINGAPORE: Brent oil may retest a support at $85.68 per barrel, a break below could open the way towards $83.04-$84.67 range.

There is a strong resistance at $89, which still holds firm under four attacks by bulls. A temporary top may have formed around this level.

Due to the slide below a rising trendline, the uptrend from $96.24 seems to have reversed. It remains unclear how much this trend could be reversed.

About 61.8% of the previous wave (a) was reversed by the wave (b). If this ratio works for the current drop, a bearish target of $74.80 could be established, which, unfortunately, looks too far away to be realistic.

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An immediate target could be $84.67.

A further gain from the current level will be regarded as an extended pullback towards the trendline. The pullback may end below $88.31.

On the daily chart, the current correction could be of the same degree with the one from the Dec. 9, 2021 high of $76.70.

A rising channel suggests a further drop to $81.57.

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