Wednesday, June 30, 2010

Crude Oil Bears Gain Momentum, Extend Tuesday's Decline

Crude oil closed lower on Wednesday as it extends yesterday's decline below the 20 day moving average crossing at 76.47. The mid-range close sets the stage for a steady opening on Thursday. Stochastics and the RSI are bearish signaling that sideways to lower prices are possible near term. Closes below last week's low crossing at 75.17 would confirm that a short term top has been posted. If August renews the rally off May's low, the 62% retracement level of last month's decline crossing at 81.13 is the next upside target. First resistance is the 10 day moving average crossing at 77.43. Second resistance is Monday's high crossing at 79.38. First support is today's low crossing at 74.39. Second support is the reaction low crossing at 70.93.

Natural gas closed higher due to short covering on Wednesday as it consolidates 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 remain bearish signaling that additional weakness is possible near term. If August extends this week's decline, the reaction low crossing at 4.285 is the next downside target. Closes above the 20 day moving average crossing at 4.871 would temper the near term bearish outlook. First resistance is the 10 day moving average crossing at 4.841. Second resistance is the 20 day moving average crossing at 4.871. First support is today's low crossing at 4.477. Second support is the reaction low crossing at 4.285.

The U.S. Dollar closed slightly lower on Wednesday as it consolidates around the 25% retracement level of the November-June rally crossing at 85.71. The mid-range close sets the stage for a steady opening on Thursday. Stochastics and the RSI are turning bullish hinting that a short term low might be in or is near. Closes above the 20 day moving average crossing at 86.93 would confirm that a short term low has been posted. If September renews this month's decline, the 38% retracement level of the November-June rally crossing at 83.83 is the next downside target. First resistance is last Wednesday's high crossing at 86.71. Second resistance is the 20 day moving average crossing at 86.93. First support is last Monday's low crossing at 85.36. Second support is the 38% retracement level of the November-June rally crossing at 83.83.

Gold closed higher due to short covering on Wednesday but remains below the 10 day moving average crossing at 1244.90. The mid-range close sets the stage for a steady opening on Thursday. Stochastics and the RSI are neutral to bearish hinting that a short term top might be in or is near. Closes below last Thursday's low crossing at 1225.20 are needed to confirm that a short term top has been posted. If August renews this year's rally into uncharted territory, upside targets will now be hard to project. First resistance is last Monday's high crossing at 1266.50. First support is Tuesday's low crossing at 1227.60. Second support is last Thursday's low crossing at 1225.20.

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