SINGAPORE: US oil may test a support of $79.04 per barrel, as it has broken a higher support at $80.14 and fallen below a triangle.
The next support will be at $79.04, which is suggested by the triangle that turned out to be a top pattern.
A common gap forming between March 31 and April 3 indicates a lower target zone of $77.25-$78.14. A break above $80.94 would make the triangle and these bearish targets invalid.
A bullish target zone of $81.92-$83.02 will be established accordingly.
On the daily chart, oil has lost its momentum after briefly piercing above a resistance at $80.62.
Its consolidation around this barrier reminds the market of its past sideways move between Feb. 6 and March 13, in a range of $71.76 to $80.62.
Oil edges higher as tighter supply looms, growth concerns weigh
History may repeat itself. The following drop may be roughly symmetrical to the historical sideways move.
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