Brent oil may break a support of $73.35 per barrel and fall into a range of $71.99-$72.83. The contract is riding on a wave c, which has travelled far below its 100% projection level of $74.19. This wave has a better chance of extending into $71.99-$72.83 range.
A retracement analysis on the rise from $71.28 to $78.66 reveals a break below a key support of $74.10.
The break increased the chance of oil to revisit the low at $71.28.
Resistance is at $74.19, a break above which could lead to a gain to $75.03. On the daily chart, oil has more or less fallen below a neutral zone of $73.82 to $77.56.
Brent oil still targets $79.81
Most of the gains from the May 15 low of $73.49 has been eaten up by the deep drop on Tuesday.
The drop looks like a convincing signal of the resumed downtrend from the April 12 high of $87.49. The March 20 low of $70.12 might be revisited very soon.
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