SINGAPORE: US oil is biased to break a support at $88.86 per barrel and fall towards $87.22, as suggested by a falling channel and a retracement analysis.
The current retracement is developing within a falling channel. Oil seems to be dropping towards $87.22-$88.86 range, after failing to break the channel line.
Resistance is at $92.53, a break above could open the way towards $95.82.
On the daily chart, it is clear that a top has formed in a strong resistance zone of $93.82 to $96.69, near the upper trendline of an expanding wedge, as oil has been remaining below this zone for about one week.
Wave pattern suggests the progress of a wave iv, which may end in the range of $84.52-$86.30, to be then reversed by an upward wave 5.
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