SINGAPORE: Brent oil may retreat into a zone of $72.08-72.71 per barrel, as it failed to break a key resistance at $74.54.

The resistance is identified as the 100% projection level of an upward wave C from $64.57. This wave may end around this barrier or extend far beyond it.

The bigger volatility on Wednesday suggests the development of a decent correction. Whether the wave C is over will be subject to a further observation. One thing is clear that this wave will be further reversed.

The depth of the correction remains a mystery. Most likely, it will extend into a range of $72.08-$72.71. Only a break above $74.54 could confirm the continuation of the uptrend.

On the daily chart, there is a false break above a resistance at $73.50. The long-expected pullback towards a wedge may have started.

A projection analysis suggests a target of $70.75, which will be available when the target zone on the hourly chart is reached.

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