Crude Oil Sharply Higher, Above 25% Retracement

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. Stochastics and the RSI are diverging but are also turning neutral to 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 64.34 are needed to confirm that a short term top has been posted.

Crude oil's pivot point for Wednesday, our line in the sand is 69.91

First resistance is the overnight high crossing at 71.65
Second resistance is the 38% retracement level crossing at 82.38

First support is the 10 day moving average crossing at 68.12
Second support is the 20 day moving average crossing at 64.34

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The U.S. Dollar was slightly lower overnight as it consolidates some of Monday's rally. Stochastics and the RSI remain 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 the overnight low crossing at 79.48
Second support is last Tuesday's low crossing at 78.37

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Natural gas was higher in overnight trading due to short covering as it consolidates below the 10 day moving average crossing at 3.890. 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 3.951 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.

Natural gas pivot point for Wednesday is 3.75

First resistance is the 10 day moving average crossing at 3.89
Second resistance is the 20 day moving average crossing at 3.95

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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