Crude oil closed lower on Wednesday as prices fell to a seven session low Wednesday due to a sharp rise in U.S. crude inventories and on a stronger dollar. The U.S. Energy Information Administration reported a 7.25 million barrel increase in crude inventories for last week, which was significantly more than the 1.4 million barrel gain that analysts had been expecting. The mid range close sets the stage for a steady opening on Thursday. Stochastics and the RSI remain bearish signaling that a short term top is in or is near. Closes below last Monday's low crossing at 79.41 are needed to confirm that a short term top has been posted. If May renews the rally off February's low, January's high crossing at 85.43 is the next upside target. First resistance is the reaction high crossing at 83.47. Second resistance is January's high crossing at 85.43. First support is Monday's low crossing at 80.89. Second support is Monday's low crossing at 78.86.
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Natural gas closed lower on Wednesday as it extends the trading range of the past four days. The low range close sets the stage for a steady to lower opening on Thursday. Stochastics and the RSI are oversold but remain neutral to bearish signaling that sideways to lower prices are possible near term. If May extends this winter's decline, weekly support crossing at 4.035 is the next downside target. Closes above the 20 day moving average crossing at 4.511 are needed to confirm that a low has been posted. First resistance is the 10 day moving average crossing at 4.308. Second resistance is the 20 day moving average crossing at 4.511. First support is Monday's low crossing at 4.093. Second support is weekly support crossing at 4.035.
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The U.S. Dollar closed sharply higher on Wednesday as worries over sovereign debt in Europe triggered today's rally. The high range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near term. If June extends last week's rally, the May 2009 high on the weekly continuation chart crossing at 83.34 is the next upside target. Closes below the 10 day moving average crossing at 80.65 would confirm that a short term top has been posted. First resistance is today's high crossing at 82.19. Second resistance is the May 2009 high on the weekly continuation chart crossing at 83.34. First support is the 20 day moving average crossing at 80.73. Second support is the 10 day moving average crossing at 80.65.
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