SINGAPORE: US oil may bounce towards $104.50, as it has stabilised around a support zone of $94.80-$96.47 per barrel.

The zone is formed by the 86.4% retracement of the rise from $89.18 to $130.50 and the 50% retracement of the uptrend from $62.43.

A narrow falling channel suggests a lower target around $101. Most likely, the bounce would end in the range of $101-$104.50.

A drop to $93.40 could confirm the continuation of the downtrend towards $89.18. On the daily chart, a retracement analysis on the fall from the 2008 high of $147.27 reveals a support at $94.86, which is working together with $94.80 (hourly chart).

Even though it is clear that the support has triggered a bounce, it is not very certain how far this bounce could go.

The target of $114.89 looks too aggressive. Conservatively, $102.07 works as a realistic target.

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