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Monday, February 6, 2023
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US oil may fall into $70.72-$72.04 range – Markets

SINGAPORE: US oil may fall into a range of $70.72-$72.04 per barrel, as pointed to by a falling trendline. The contract is riding on a wave e, the fifth wave of a five-wave cycle from the Nov. 7 high of $93.74.

This wave is expected to travel to $70.72.

The pattern between Oct. 10 and Nov. 17 has been confirmed as a double-top, suggesting a similar target around $70.

Even though the target zone of $70.72-$72.04 looks a bit far away and unrealistic, it suddenly becomes likely, due to the widespread protests and clashes in China.

The gap on Monday illustrates how worried the market has become on the overnight instability in the country.

Oil drops as price cap proposal eases supply concerns

It does not look like an exhaustion gap, but rather a runaway gap. Resistance is at $75.49, a break above which may lead to a gain into $76.55-$77.62 range.

On the daily chart, oil is expected to test a support at $71.76.

A break could be followed by a drop towards $62.89. Another calculation suggests a much lower target of $46.31.


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