The support is provided by the 38.2pc retracement of the uptrend from $8.17 to $8.92-3/4. The uptrend could have been driven by wave 3, the third wave of a five-wave cycle from the May 13 low of $7.91. It is capable of travelling to its 161.8pc projection level at $9.09-1/2.
A break below $8.63-3/4 could cause a loss into the range of $8.45-3/4 to $8.54-3/4. On the daily chart, the contract failed to break a resistance at $8.92-1/2, the 38.2pc projection level of a downward wave C from $9.64-1/4.
The correction triggered by the resistance seems to be ending around a support at $8.70-1/2.
The contract may retest the resistance.
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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.
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