Brent oil may retest a support at $85.79 per barrel, as a five-wave cycle from $77.61 may have completed. The cycle ended with a failed fifth wave which is labelled “5”.
In terms of classical pattern, this wave could be regarded as a part of a double-top. Alternatively, the wave 5 may be counted as a wave b, the second wave of a presumed flat pattern from $89.09.
However, this flat pattern will only be seriously considered when oil breaks $89.09. At this momentum, the favourite scenario will be a drop below $85.79.
Brent oil neutral in $87.05-$88.11 range
A break above $88.11 may lead to a gain to $89.09.
On the daily chart, the consolidation below a resistance at $89.28 is interpreted as a weakness of the wave c, rather than an accumulation of the bullish momentum.
Until it breaks $89.28, oil is likely to fall towards $83.63.
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