SINGAPORE: US oil is expected to retest a support at $90.46 per barrel after a moderate rebound to $91.42, as indicated by its wave pattern and a Fibonacci projection analysis.
The support is provided by the 61.8 percent Fibonacci projection level of a downward wave 3, the third wave of a five-wave cycle that developed from the Sept. 30 high of $94.90.
The rebound triggered by the support may end at $91.42 - the 38.2 percent level, a rise above which may be limited to $92.01, the 23.6 percent level.
The break below $90.46 will be significant, as it will confirm a bearish range that has been forming from Nov. 9. Based on a this pattern, oil may eventually reach $85.83.
** 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.
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