SINGAPORE: US oil may retest a resistance at $73.33 per barrel, as its consolidation within a wedge has extended. The extension may end around either $73.33 or $70.91.
There is a vague indication that the wedge may turn out to be a bullish continuation pattern, as it formed after a rise from $63.64. However, the confirmation will only be when oil stands firm above $73.33.
A failure to do so will result into a drop towards $70.91, which may prove itself to be the true ending point of the wedge.
Currently, there seems to be no better strategy than to patiently wait for the market to reveal its real intention, even though it is likely that oil could climb to $73.33 in its first move.
US oil may retrace to $71.83 before rising
On the daily chart, signals look in favour of a rise towards $75.62, rather than a drop below the support of $70.02, as market has been maintaining above $70.02 for a number of days.
Amid the mixed readings, one thing could be rather clear that the downtrend from $93.76 may eventually extend below $64.42, towards its 100% projection level of $46.29.
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