Oil may retrace toward $84.06
USO•U.S. oil faces retracement after failing at resistance
SINGAPORE, Aug 20 (Reuters) - U.S. oil CLc1 may retrace toward $84.06 per barrel, following its failure to break a resistance zone of $86.29 to $86.53.
The zone is formed by the 61.8% retracement of the downtrend from $93.73 and the 61.8% projection level of a wave c from $80.06.
The failure increases the risk of a decent correction and indicates a completion of wave c in this range. A break above $86.53 could open the way toward $88.06.
On the daily chart, a retracement analysis on the uptrend from $67.04 reveals a resistance at $87.50, which is strengthened by the peak of the wave b at $86.87.
These resistances are working together with those on the hourly chart to stop the rise and force the market to consolidate.
