Brent oil may break a support of $84.52 per barrel and keep falling into $82.80-$83.66 range. The deep drop on Monday further indicates the completion of a wave (5) and the reversal of the uptrend from the March low of $70.12.
The contract seems to be heading towards the bottom of the wave (4) around $83.66.
However, the downside may not be limited to this level. One of the purposes of the fall could be covering a common gap. To fully fill this gap, oil may fall to $80.
Brent oil may retest support of $85.59
Resistance is at $85.59, a break above which could lead to a gain into $86.32-$86.92 range. On the daily chart, the strong rise from the March 20 low of $70.12 might have been driven by a wave (D), the fourth wave of a five-wave cycle from $139.13.
It is expected to be reversed by a wave (E). A target range of $89.28-$93.44 will be established if oil climbs above the April 12 high of $87.49.
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