SINGAPORE: US oil may drop into a range of $80.14-$80.89 per barrel, as it failed to break a resistance at $83.70. The failure suggests a completion of a wave (5), or the first part of this wave.

The bearish divergence on the hourly RSI indicates an exhaustion of the rally and a decent correction.

Adding to the bearish odds is a common gap forming on April 3, which will be inevitably covered.

Strategically, it is safer to target $80.14-$80.89 range first.

US oil may test support of $79.04

A break above $83.70 could open the way towards $84.80-$86.59 range.

On the daily chart, a target zone of $86.11-$88.74 has to be aborted, as oil failed to break $83.48.

The failure increases a chance of a drop to $80.62.

It must be noted that the whole rise from $64.12 might have been driven by a wave (D), which is expected to be reversed by a wave (E).