Tuesday, April 13, 2010

Crude Oil Extends Decline Below 10 Day Moving Average


Crude oil was lower overnight as it extends Monday's decline below the 10 day moving average crossing at 84.89. Stochastics and the RSI have turned bearish signaling that sideways to lower prices are possible near term. Closes below the 20 day moving average crossing at 83.22 would confirm that a short term top has been posted while opening the door for a larger degree decline during April. If May renews the rally off February's low, the 50% retracement level of the 2008-2009 decline crossing at 97.31 is the next upside target. First resistance is last Tuesday's high crossing at 87.09. Second resistance is the 50% retracement level of the 2008-2009 decline crossing at 97.31. First support is the overnight low crossing at 83.43. Second support is the 20 day moving average crossing at 83.22.

Natural gas was slightly higher due to short covering overnight as it consolidates some of Monday's decline. Stochastics and the RSI are neutral to bullish hinting that a short term low might be in or is near. If May renews the rally off April's low, the 25% retracement level of the October-April decline crossing at 4.405 is the next upside target. If May renews last week's decline, the early April low crossing at 3.810 is the next downside target. First resistance is last Tuesday's high crossing 4.316. Second resistance is the 25% retracement level of the October-April decline crossing at 4.405. First support is last Thursday's low crossing at 3.857. Second support is April's low crossing at 3.810.

The U.S. Dollar was lower overnight as it extends the decline off March's high. Stochastics and the RSI remain bearish signaling that sideways to lower prices are possible near term. Closes below the reaction low crossing at 80.52 would confirm that a short term top has been posted while opening the door for a possible test of March's low crossing at 79.73 later this spring. Closes above last Thursday's high crossing at 82.06 are needed to confirm that a short term low has been posted. First resistance is Monday's gap crossing at 81.01. Second resistance is the 10 day moving average crossing at 81.24. First support is Monday's low crossing at 80.22. Second support is March's low crossing at 79.73.

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