U.S. oil may test support zone of $83.88-$84.13

On the daily chart, the market failed to break a resistance at $87.53. The failure seems to have triggered a correction to $84.41, the 38.2% projection level of a wave (c) from $74.30.

There is no clear indication of whether the market would drop deeper to $80.55; however, the current fall might be roughly symmetrical to the rise from the July 28 low of $77.78.

Based on this assumption, the contract may retrace toward $80.55.

SINGAPORE, Aug. 24 (Reuters) - U.S. oil October contract CLV26 may test a support zone of $83.88 to $84.13 per barrel, and a break below may trigger a fall into the range of $81.61 to $82.60.

The contract has broken a rising trendline. The break suggests a reversal of the uptrend from $74.26. The current correction seems to have been closely observing a series of retracements on the downtrend from $93.50 to $74.26.

With the support at $86.15, the 61.8% level, having been broken, the market is expected to test $83.88. A break above $86.15 may lead to a gain into range.