SINGAPORE: US oil may retest resistance at $73.33 per barrel, as suggested by its wave pattern and a rising channel. The contract could be riding on a wave c, the third wave of a three-wave cycle from $63.64.
This wave consists of five smaller waves. The final small wave is unfolding towards $73.33-$75.74 range. All these waves seem to have been developing within a channel, which suggests a target of $74.54.
Key support is at $70.91, a break below which could be followed by a drop to $69.41. On the daily chart, a projection analysis reveals a consolidation range of $70.02-$75.62. Given that the contract has risen far above a support of $70.02, it may test the resistance at $75.62.
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A break above this barrier could open the way towards $82.55, while a failure to break it may signal the completion of the bounce from the May 4 low of $63.64. A deep drop could follow thereafter.
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