SINGAPORE: US oil may test a support at $106.10 per barrel, a break below that could open the way towards $103.45.

The drop from the June 29 high of $114.05 is classified as a continuation of the downtrend from the June 14 high of $123.68.

The drop adopted a five-wave mode, which suggests a very limited bounce from the July 1 low of $104.56.

Indeed, the bounce may have completed around a resistance at $109.27.

Brent oil may retest support at $113.97

Oil is poised to fall towards $104.56 again.

A break above $109.27 may lead to a gain into $110.39-$112.03 range.

On the daily chart, oil is riding on a wave (C) which is expected to travel to $100.46 or a much lower level of $86.11.

The white candlestick on July 1 looks not big enough to form a reversal signal together with the preceding black candle.

Most likely, the wave (C) would continue soon.