US oil may fall into $77.93-$78.80 range

U.S. oil CL1! may fall into a range of $77.93-$78.80 per barrel, as it failed to break a falling trendline.

The failure not only suggested the completion of a bounce from the August 24 low of $77.59, but also indicated a steady downtrend from $84.89.

The trend may have resumed towards $77.93. Only a rise above $81.07 could confirm the extension of the bounce towards $82.47.

On the daily chart, a doji formed on Monday, confirming the exhaustion of the bounce. The target of $82.13 has to be aborted.

Oil is expected to retest a support of $78.67, a break below which could open the way towards $73.65-$76.38 range.

The following gain is tentatively classified as a bounce against the fall from the Aug. 10 high of $84.89. This classification will be reviewed once the contract breaks $82.13.

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** Wang Tao is a Reuters market analyst for commodities and energy technicals. The views expressed are his own.

** No information in this analysis should be considered as being business, financial or legal advice. Each reader should consult their professional or other advisers for business, financial or legal advice regarding the products mentioned in the analyses.