Brent oil may test resistance zone of $74.47-$74.54

SINGAPORE: Brent oil may test a resistance zone of $74.47-$74.54 per barrel, a break above which could lead to a gain into $75.01-$75.55 range.

The uptrend remains steady. It is riding on a wave 5, which is expected to be roughly equal to the wave 1, to travel to $74.47.

Given that this target of $74.47 has almost been fulfilled, oil is likely to extend its gains to $75.55.

However, this higher target will not be valid until oil breaks a key resistance of $74.54, the 100% projection level of an upward wave C from $64.57.

Indeed, the shadow of a decent correction is looming.

The wave C has been suffering a weak momentum, as it unfolded in slow pace.

However, it has not been disrupted by any deep correction. The resistance at $74.54 is one of the strong barriers that may trigger a correction.

Support is at $73.80, a break below which could be followed by a drop into $72.71-$73.38 range. On the daily chart, oil has broken a resistance at $73.50, the break opened the way towards $77.96.

Signals on the hourly chart suggest a pullback towards this former resistance or a consolidation around it.

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