Brent oil may rise into a range of $78.30-$79.44 per barrel, following the completion of a five-wave cycle from $88.44. The wave 4 ended around $80.15, which serves as a bounce target.
Before fulfilling this target, oil needs to break the resistance zone of $78.30-$79.40.
The bullish divergence on the hourly RSI continues to build up.
It suggests an exhaustion of the downtrend and a further bounce.
Support is at $75.31, a break below which could open the way towards $72.07-$73.96 range.
On the daily chart, oil seems to have lost its momentum after piercing below a support of $77.56, which is jointly provided by the 114.6% projection level of a wave (C) and the 50% retracement on the uptrend from $15.98 to $139.13.
A valid break below this support has thus not been confirmed.
Oil rises on uncertainty over US pipeline restart, Russian supplies
The spinning top on Dec. 9 indicates a dissipation of the bearish momentum.
A bounce is highly likely, which could be as strong as the one from the Nov. 28 low of $80.61 to the Dec. 1 high of $89.37.
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