Tuesday, May 25, 2010

Crude Oil, Natural Gas, Gold and Dollar Commentary For Tuesday Evening

Crude oil closed lower on Tuesday as it extended this month's decline. A short covering rally tempered early losses and the mid range close sets the stage for a steady opening on Wednesday. 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 78.58 are needed to confirm that a short term low has been posted. First resistance is the 10 day moving average crossing at 73.30. Second resistance is the 20 day moving average crossing at 78.58. First support is today'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 Tuesday as it consolidated some of last week's decline. The high range close sets the stage for a steady to higher opening on Wednesday. Stochastics and the RSI remain 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 4.291 would temper the near term bearish outlook. First resistance is the 20 day moving average crossing at 4.229. Second resistance is the 10 day moving average crossing at 4.291. First support is today's low crossing at 4.036. Second support is this month's low crossing at 3.971.

The U.S. Dollar closed higher on Tuesday as it extended Monday's rally. However, profit taking tempered early session gains and the low range close sets the stage for a steady to lower opening on Wednesday. Stochastics and the RSI are neutral to bearish signaling that sideways to lower prices are possible near term. Closes below the 20 day moving average crossing at 84.83 are needed to confirm that a short term top has been posted. 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. 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 84.83.

Gold closed higher due to short covering on Tuesday as it consolidated some of last week's decline but remains below the 20 day moving average. The high range close sets the stage for a steady to higher opening on Wednesday. Stochastics and the RSI remain neutral to bearish signaling that sideways to lower prices are possible near term. If June extends last week's decline, the reaction low crossing at 1156.20 is the next downside target. Closes above the 10 day moving average crossing at 1209.10 would temper the near term bearish outlook. First resistance is the 20 day moving average crossing at 1198.40. Second resistance is the 10 day moving average crossing at 1209.10. 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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