Oil in New York may rise to $106 a barrel in
coming weeks as price mirror an early-May pullback in 2010 that launched a rally during the rest of that year, according to technical analysis by Societe Generale SA, reported by Alexander Kwiatkowski, Jane, Ching Shen Lee.
Crude, heading for the first monthly decline since August, has rebounded from its Fibonacci support near $95 a barrel, a level based on weekly price swings over the past year, according to Stephanie Aymes, a cross-commodity technical analyst at France’s second-largest bank by market value. Oil will probably continue to trade “sideways” in coming weeks before climbing to $106, the next Fibonacci retracement level, she said.
Based on July futures on the weekly chart, crude has held above the 50-percent Fibonacci retracement at $94.74 a barrel and is likely to target the 61.8 percent retracement at $105.58, according to Aymes.
“I don’t expect the rise to resume right now but the market will test the upper limit of the range first,” she said. “The uptrend remains intact.”
The Fibonacci sequence of numbers was identified by Italian mathematician Leonardo Fibonacci in the 13th century and is used to predict points where prices may rise or fall.
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