SINGAPORE: US oil may test a resistance at $69.77 per barrel, a break above which could lead to a gain into $70.76-$71.38 range. The contract has found a strong support at $64.12, the March low. Its strong reaction to this barrier signals a completion of a wave c from $79.18.
The current bounce could be against either the wave c or the trend from $83.44.
A conservative calculation based on the retracement analysis on the fall from $79.18 reveals a bounce target zone of $69.58-$71.41.
Support is at $68.16, a break below which could open the way towards $65.56-$66.49 range. On the daily chart, three supports are working together to stop the fall.
They are identified respectively as the March low of $64.12, the 61.8% projection level of a wave C from $93.76 and the 161.8% projection level of a (C) $123.68. The nature of the current bounce remains unclear.
It could be either against the fall from around $83.48 or the third leg of a flat pattern developing from $64.12.
In either case, the bounce may extend over the next few days, towards $71.76.