US oil may retrace into $75.97-$76.86 range

U.S. oil CL1! may retrace into a range of $75.97 to $76.86 per barrel, following its failure to break a resistance at $77.97.

The failure reflects an exhaustion of the rise from $72.16. Hourly RSI fell from the Monday high of $78.22, which further suggests an overbought market status.

Either the rise itself or its first round has completed. A break above $77.97 may lead to a gain into $78.74-$79.77 range.

On the daily chart, the current bounce is expected to be as strong as the one from the Oct. 6 low of $81.50, to extend towards a target zone of $79.34 to $83.04.

However, with signals of exhaustion having formed on the hourly chart, market may experience a pullback towards $75.63, the former resistance.

The bounce may resume upon the completion of the pullback.

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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.