Brent oil may test a resistance at $78.73, a break above which could open the way towards $79.61-$80.32 range. The contract has found a support at $77.31, which is expected to hold for a few days. The current bounce is extending towards the peak of the wave b around $83.33.

In view of the strong bearish momentum, this level seems to be very unrealistic.

A bounce target could be at either $79.61 or $80.32.

It won’t be much out of expectation if the bounce ends around $78.73.

A break below $77.31 could confirm the continuation for the downtrend towards $73.59-$75.01 range. On the daily chart, both a bearish flag and the continuation of a wave (C) from $125.19 have been confirmed.

The flag suggests a target of $57.95, the 161.8% projection level of the wave (C). The support of $77.56 is working together with the $77.31 (hourly chart) to temporarily stop the fall.

Brent oil may retest support at $78.73

After the two consecutive days of drop, a downtrend has been firmly established.

A bounce from the current level may be limited to $80.72 , near $80.32 (hourly chart).