SINGAPORE: US oil may retrace into a range of $87.27 to $87.87 per barrel, as it broke a support at $88.70. A small five-wave cycle seems to have ended around a resistance at $89.59.

The current drop may extend to the bottom of the wave 4 around $87.27.

The tricky part is whether the uptrend from $82.63 has reversed.

The reversal will be confirmed when oil breaks $87.27. a break above $88.70, now a resistance, may lead to a gain into $89.59-$91.02 range.

On the daily chart, oil has broken a resistance at $87.44.

The break opened the way towards $94.37. However, a falling trendline established a resistance around $89, which stopped the rise.

US oil may retrace into $86.38-$87.27 range

In view of the bearish readings on the hourly chart, oil may retrace towards $87.44.

The retracement is tentatively classified as a pullback.

The classification will be reviewed if oil closes far below $87.44 on Friday.