SINGAPORE: Brent oil may fall more to $67.14 per barrel, as it has pierced below a support at $68.76.
The reaction of the market to the resistance at $69.87 is so strong it suggests the completion of a wave (c) from $61.25, which briefly travelled above its maximum target of $69.65, the 161.8% projection level.
Either the third leg of the correction from $71.38 has started, or a decent correction against the rally from $61.25 is developing.
In either case, oil is expected to retrace further over the next few days. Only a rise above $69.87 could confirm the continuation of the uptrend towards $71.38.
On the daily chart, wave pattern suggests a completion of a wave 3-1, the first wave of a five-wave cycle. This wave may be reversed deeply by the current wave 3-2. The fierce rally would only begin upon the completion of the wave 3-2.
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