SINGAPORE: US oil may extend its gains into a range of $68.40-$68.77 per barrel, before starting a correction.

The rise is driven by a wave 3, which is heading towards the target zone formed by its 286.4% and the 300% projection levels.

This wave has not been disrupted by any decent correction yet.

Such a correction may occur in the target zone, as suggested by a rising trendline. An exhaustion gap formed on Monday, which may be covered over the next few days.

Support is at $67.07, a break below which could cause a fall into $66.02-$66.42 range.

On the daily chart, oil has cleared a resistance at $67.14, it may rise to $71.93, the 100% projection level of an upward wave C from $51.64.

However, before climbing towards this target, the contract may pull back towards a zone of $65.65-$66.60, formed by the Jan. 8, 2020 high and the April 24, 2019 high. This pullback may occure over the next one or two days.

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