The trend could be broken down into five waves. The bullish divergence on the hourly RSI supports the wave count. This structure signals a reversal of the trend.
The current bounce may extend further. A break below $3.58, however, could cause a loss to $3.55-1/4.
On the daily chart, the five-wave cycle seems to have ended around a strong support at $3.56-1/4, the 100 percent projection level of a downward wave (c) from $3.97-3/4. The two lows forming on March 29 and April 9 indicate the formation of a double-bottom. A break below $3.56-1/4 could cause a loss to $3.50.
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Wang Tao is a Reuters market analyst for commodities and energy technicals. The views expressed are his own.
No information in this analysis should be considered as being business, financial or legal advice. Each reader should consult his or her own professional or other advisers for business, financial or legal advice regarding the products mentioned in the analyses.