SINGAPORE: US oil may retest a resistance at $74.54 per barrel, a break above which could lead to a gain to $75.74.

The strong recovery of the price from the May 25 low of $70.98 suggests an extension of a wedge. Five small waves make up the pattern. The fifth wave, the wave e could be climbing towards $74.54 to $74.74 range.

Support zone is from $71.83 to $72.22, a break below could confirm a target range of $69.41 to $70.13. A drop into this range would be a convincing signal of a continuation of the medium-term downtrend.

On the daily chart, signals turned a bit neutral, after oil refused to test a support of $70.02. The only explanation to its capricious behaviour could be an incomplete consolidation in the range of $70.02-$75.62.

How market is going to end its consolidation remains unclear. Only time is a friend, as well as an escape from the range.