SINGAPORE: US oil may retrace into a range of $69.80-$70.79 per barrel, following its failure to break a resistance at $72.87.

The contract has come to a critical point in trend development. Either the trend could extend towards $74.98-$76.59 range, or reverse and develop towards $69.80.

The failure to break $72.87 looks a bit bearish. However, the chance for a strong rise will not be fully wiped out, if oil could remain above $71.47.

A break above $72.87 could open the way towards $74.98-$76.59 range, while a drop into the range of $69.80-$70.79 as anticipated will confirm a continuation of the downtrend.

On the daily chart, as long as oil remains in the narrow range of $69.36-$73.13, trending signals will be neutral.

It appears to be still under a consolidation mode around a rising trendline.

Until it climbs above the line, it is still prone to a sudden deep drop.

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