SINGAPORE: US oil may test a support at $72.70 per barrel, with a good chance of breaking below this level and falling towards $71.28-$71.96 range.

The deep fall on Tuesday suggests a reversal of the uptrend from $61.56.

The fall may last two or three days. Oil seems to have completed a weak pullback towards a short rising trendline. The drop has resumed.

A break above $73.57, which looks unlikely, may lead to a gain into $74.14-$74.99 range.

On the daily chart, oil broke a support at $74.42.

The break opened the way towards $70.37, which is pointed by a rising channel as well.

The current drop could be driven by a wave 4, which may end around $70.37, to be reversed by an upward wave 5.

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