SINGAPORE: US oil may retest a resistance at $86.76 per barrel, a break above could open the way towards $88.07.

After its first wave of bounce ended around $86.76 on Sept. 16, the contract climbed above $85.70 and is approaching $86.76 again.

A break above $86.76 will not only trigger a further rise, but also indicate an extension of the uptrend from $81.20.

A break below $84.63 could confirm the continuation of the downtrend towards $81.20.

US oil may retest resistance at $85.70

On the daily chart, the downtrend looks steady. It is riding on a wave C that could travel to $73.93.

This wave is a part of a bigger wave (C) from $123.68, which has a target zone of $62.98 to $71.76.

Only a break above $89.20 could change the bearish outlook.