Wednesday, May 26, 2010

Crude Oil, Natural Gas and U.S Dollar Commentary For Wednesday Evening

Crude oil closed higher due to short covering on Wednesday as it consolidated some of this month's decline. The high range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI are oversold but remain neutral to bearish signaling that sideways to lower prices are possible near term. If July extends this month's decline, last July's low crossing at 66.11 is the next downside target. Closes above the 20 day moving average crossing at 77.86 are needed to confirm that a short term low has been posted. First resistance is the 10 day moving average crossing at 72.41. Second resistance is the 20 day moving average crossing at 77.86. First support is Tuesday's low crossing at 67.15. Second support is last July's low crossing at 66.11.

Natural gas closed higher due to short covering on Wednesday as it consolidated some of last week's decline. The low range close sets the stage for a steady to lower opening on Thursday. Stochastics and the RSI remain neutral to bearish signaling that sideways to lower prices are possible near term. If July extends last week's decline, this month's low crossing at 3.971 is the next downside target. Closes above the 10 day moving average crossing at 4.267 would temper the near term bearish outlook. First resistance is the 10 day moving average crossing at 4.267. Second resistance is this month's high crossing at 4.587. First support is Tuesday's low crossing at 4.036. Second support is this month's low crossing at 3.971.

The U.S. Dollar closed higher on Wednesday as it extended this week's rally. The high range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI are diverging but turning bullish again signaling that sideways to higher prices are possible near term. If June renews this year's rally, the 87% retracement level of 2009's decline on the weekly continuation chart crossing at 87.79 is the next upside target. Closes below the 20 day moving average crossing at 85.06 are needed to confirm that a short term top has been posted. First resistance is last Wednesday's high crossing at 87.63. Second resistance is weekly resistance crossing at 87.79. First support is last Friday's low crossing at 85.33. Second support is the 20 day moving average crossing at 85.06.

Gold closed higher on Wednesday and above the 10 day moving average crossing at 1206.10 confirming that a short term low has been posted. The high range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI are turning neutral to bullish signaling that sideways to higher prices are possible near term. If June extends today's rally, this month's high crossing at 1249.70 is the next upside target. First resistance is today's high crossing at 1216.90. Second resistance is this month's high crossing at 1249.70. First support is last Friday's low crossing at 1166.00. Second support is the reaction low crossing at 1156.20.

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