Brent oil may climb into $71.47-$71.80 range before falling

SINGAPORE: Brent oil may climb into a range of $71.47-$71.80 per barrel, before starting a correction.

The contract could be riding on a wave 5, which is traveling towards the target zone formed by the 361.8% and the 376.4% projection levels of an uptrend from $63.33.

A rising trendline points at the target zone as well. However, it must be noted that a correction is due. An exhaustion gap formed on Monday, following the successive gains from the March 3 low of $62.38.

This gap may be filled over the next few trading days. Support is at $70.41, a break below which could cause a fall into $69.55-$70.08 range.

On the daily chart, oil faces a resistance zone of $70.75-$71.75. The linear rise from March 3 may pause around this zone, to be partially reversed by a correction.

Given that oil has surged far above a key barrier at $66.29, it is likely to extend into a range of $77.96-$85.17 in due course.

The uptrend is expected to resume once the shallow correction completes.

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