SINGAPORE: US oil may retrace into a range of $86.38 to $87.27 per barrel, as it faces a resistance at $88.70.
The resistance is identified as the 100% projection level of a wave C from $82.63, which may either end around $88.70 or extend a lot towards $92.45.
Regardless of the ending point, the resistance at $88.70 could work effectively and trigger a correction.
A break above $88.70 could confirm a target zone of $89.59-$90.13.
On the daily chart, oil seems to have broken a resistance at $87.44.
The break may have opened the way towards $94.37.
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However, the celebration looks a bit early to bulls, as readings on the hourly chart suggest a consolidation around $87.44.
This target will only become available when the consolidation is over.
A close far below $87.44 on Thursday would be a warning that this target could hardly be reached.
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