SINGAPORE: US oil may test a support at $70.10 per barrel, a break below which could open the way towards $68.93.
The deep fall on Thursday has badly disrupted the rhythm of the uptrend from $67.03, which was presumed to extend above $75.06. It is very doubtful if the uptrend could resume.
But similarly uncertain is the extension of the downtrend from $75.06.
Signals will be relatively tricky before oil gets out of the range of $68.93-$73.16.
If the sharp surge from the Thursday low of $69.03 is classified as a pullback towards a rising trendline, this low could be revisited.
A break above $71.99 could lead to a gain to $73.16.
On the daily chart, oil briefly pierced below a support at $70.02.
This latest move has a bearish indication that a rising wedge may turn out to be a continuation pattern.
To confirm the bearish wedge, a fall below $69.03 is required.