SINGAPORE: US oil may test a resistance at $74.54 per barrel, as it has broken a lower resistance at $73.33. The break is important in confirming the extension of a wave c from $69.41.

It also removed a key obstacle for this wave to travel freely into a new territory of $75.74-$79.66. A wedge has been confirmed as a bullish continuation pattern, suggesting a mediocre target around $77.

The former resistance at $73.33 has turned itself into a strong support, stopping any retreat below it. A drop below $73.33 would mean the break above this level was false, all the bullish targets have to be temporarily aborted.

US oil may retest resistance at $73.33

On the daily chart, the contract is expected to test the resistance at $75.62, a break above which could open the way towards $82.55.

Such a strong gain to $82.55 would prompt a review of the current long-term bearish outlook, which is based on a wave count that a wave C from $93.76 is yet to travel to $46.29.