SINGAPORE: US oil is expected to drop into a range of $115.86 to $118.39 range, following its failure to break a resistance at $122.49 per barrel.

The resistance is identified as the 100% projection level of an upward wave (c) from $105.13.

This wave could either end around $122.49 or extend a lot to $133.22.

US oil to test resistance at $123.65

Regardless of its ending point, this wave could be further reversed by the current correction. A rising trendline roughly points at $118.39.

A break above $122.49 may lead to a gain to $126.59.

On the daily chart, oil failed to break a resistance at $121.63.

The failure may have triggered a correction towards $116.15.

A bullish target of $130.50 will look questionable until oil breaks $121.63.