SINGAPORE: Brent oil may retest a resistance at $71.18 per barrel, a break above which could lead to a gain to $72.41.
The bounce from the Aug. 9 low of $67.60 is so strong that it suggests a completion of the wave (c) from the July 30 high of $76.38. The sharp surge over the past two days also indicates the development of a wedge, which may consist of three or five waves.
The bounce is presumed to be driven by a wave (d) which is travelling towards the upper trendline of the wedge around $74.86.
Support is at $69.95, a break below which could cause a fall to $68.43. On the daily chart, the uptrend managed to keep steady, as oil stabilized above a rising trendline.
The contract has pierced above $70.75, it is likely to extend gains to $73.50.
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