US oil to retrace into $81.94-$83.26 range
XLE•U.S. oil faces resistance at $85.38
SINGAPORE, July 22 (Reuters) - U.S. oil CLc1 is expected to retrace into a range of $81.94-$83.26 per barrel, as it faces strong resistance at $85.38.
Identified as the 161.8% projection level of an uptrend from $70.80, the barrier is likely to stop the rise and trigger a decent correction.
The resistance itself may not be sufficient to cause a correction. But when supported by the multiple bearish divergences on the hourly MACD, the possibility will be high.
On the daily chart, a projection analysis marks a similar resistance at $86.48, the 61.8% level. This resistance is working together with the one on the hourly chart to stop a further rise.
Unless the bullish momentum turns out to be exceptionally strong, a correction will be highly likely.
