SINGAPORE: Brent oil may drop more to $70.47 per barrel, as it has broken a support at $71.86.

The drop on Wednesday was due to a contract switch on the continuous chart.

However, it could be technically interpreted as a break below $71.86.

Brent oil may retest resistance at $73.58

The break opened the way towards $70.47. It was accompanied by a big gap which signals a strong drop over the next few days.

With all these bearish signals in place, it is time to conclude that the uptrend from $64.60 is over.

Either oil has started a deep correction or the downtrend from the July 6 high of $77.84 has resumed.

A break above $71.86 may lead to a gain limited to $72.51.

On the daily chart, oil failed to break a resistance at $73.69.

The failure could have triggered a drop towards $66.98-$69.06 range.

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