SINGAPORE: US oil may retest a resistance at $69.77 per barrel, a break above could lead to a gain into the $70.76-$71.38 range.
The current bounce seems to be against a wave c from $79.18, as revealed by a retracement analysis. The strong momentum of the bounce suggests its extension towards the $71.41-$73.24 range.
Immediate support is at $68.16, a break below could open the way towards the $66.49-$68.16 range.
Once the contract drops into this zone, it will be unlikely to bounce again. Instead, it may slide towards the recent low of $63.64.
On the daily chart, three supports are working together to stop the fall.
They are identified respectively as the March low of $64.12, the 61.8% projection level of a wave C from $93.76 and the 161.8% projection level of a (C) $123.68.
US oil may test resistance at $69.77
The long-shadowed doji on Thursday indicates a reversal of the downtrend from the April 13 high of $83.44.
Oil may first climb towards the nearest resistance at $71.76.
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