SINGAPORE: U.S. oil may retest a resistance at $73.16 per barrel, a break above could lead to a gain to $73.89-$75.06 range.
The gain on Wednesday further suggests an extension of the uptrend from $67.03. The trend was supposed to have been driven by a wave C, which looks relatively too brief and short compared to the preceding wave A.
The inconsistency between these two waves finds its way to the assumption that the wave C may have only partially completed at the Monday high of $75.06.
It is critical that oil stays above a key support of $71.99, as a break below could open the way towards the $70.10-$71.05 range. A drop into this range will definitely violate the uptrend.
On the daily chart, oil managed to stabilize around a support at $70.02. It may attempt to break the resistance at $75.62. The attempt is considered as a part of the consolidation in a rising wedge.
The pattern will be confirmed as a bullish pattern if oil breaks $75.62, or a bearish one if the contract breaks $70.02.
(Reporting by Wang Tao; Editing by Sherry Jacob-Phillips)