Crude Oil Rally Slowed By Rising U.S. Dollar

Crude oil was higher overnight as it extends this week's rally above the 25% retracement level of the 2008-2009 decline crossing at 68.49 but was slowed Thursday morning as the U.S. Dollar rose sharply against the Japanese Yen. Stochastics and the RSI are diverging but are also bullish signaling that additional gains are possible.

If July extends this spring's rally, the 38% retracement of the 2008-2009 decline crossing at 82.38 is the next upside target. Closes below the 20 day moving average crossing at 65.00 are needed to confirm that a short term top has been posted.

Thursday's pivot point for crude oil, our line in the sand is 71.24

First resistance is the overnight high crossing at 72.30
Second resistance is the 38% retracement level crossing at 82.38

First support is the 10 day moving average crossing at 68.82
Second support is the 20 day moving average crossing at 65.00

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The U.S. Dollar was lower overnight as it consolidates some of the rally off last week's low. Stochastics and the RSI remain neutral to bullish signaling that sideways to higher prices are possible near term.

If June extends the rally off last week's low, the reaction high crossing at 83.33 is the next upside target. Closes below the 10 day moving average crossing at 79.78 would temper the near term friendly outlook in the Dollar.

First resistance is Monday's high crossing at 81.53
Second resistance is the reaction high crossing at 83.33

First support is Wednesday's low crossing at 79.48
Second support is last Tuesday's low crossing at 78.37

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Natural gas was higher overnight due to short covering as it consolidates below the 10 day moving average crossing at 3.855. Stochastics and the RSI are neutral to bearish signaling that sideways to lower prices are possible near term.

If July extends last week's decline, the reaction low crossing at 3.500 is the next downside target. Closes above the 20 day moving average crossing at 3.908 would signal that a short term low has been posted. Closes above last Tuesday's high are needed to renew the rally off the late May low and would open the door for a possible test of May's high crossing at 4.690.

Thursday's pivot point for natural gas is 3.74

First resistance is the 10 day moving average crossing at 3.86
Second resistance is the 20 day moving average crossing at 3.90

First support is last Thursday's low crossing at 3.55
Second support is the reaction low crossing at 3.50

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