Thursday's sell off in crude yesterday seemed to be led by weakness in the equity markets in reaction to warnings that the UK could lose its AAA rating, increasing demand concerns about the global economy going forward. The decline was tempered by the energy sector getting a boost from a weak US dollar that set multi month lows against the Euro.
Stochastics and the RSI are overbought, diverging but are bullish signaling that sideways to higher prices are possible near term.
If July extends this spring's rally, the 25% retracement of the 2008-2009 decline crossing at 68.49 is the next upside target. Closes below the 20 day moving average crossing at 57.37 are needed to confirm that a short term top has been posted.
I expect day traders trading the long side to pour in around the 59.90 area "if" we have any pull back at all today. That's a big if as the dollar continues to weaken this morning.
Friday's pivot point, our line in the sand is 60.95
1st resistance is 61.97
2nd resistance is 62.90
3rd resistance is 63.92
1st support is 60.02
2nd support is 59.00
3rd support is 58.07
The June Dollar was lower overnight as it extends this year's decline and spiked below December's low crossing at 80.25. Stochastics and the RSI are oversold but are bearish signaling that additional weakness is possible near term.
If June extends the decline off April's high, last September's low crossing at 76.91 is the next downside target. Closes above the 20 day moving average crossing at 83.23 would confirm that a short term low has been posted.
First resistance is the 10 day moving average crossing at 82.02
Second resistance is the 20 day moving average crossing at 83.23
First support is the overnight low crossing at 80.20
Second support is last September's low crossing at 76.91
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