Crude Oil, Natural Gas and U.S Dollar Commentary For Wednesday Evening

Crude oil [May contract] closed up $1.59 a barrel at $102.63 today. Prices closed nearer the session high today and saw short covering after prices Tuesday hit a seven week low. A weaker U.S. dollar index supported crude today. A five week old downtrend line is still in place on the daily bar chart. Bulls and bears are on a level near term technical playing field.

Gold futures [June contract]closed down $1.70 an ounce at $1,659.00 today. Prices closed near mid range in quieter, consolidative trading. The key outside markets were in a bullish posture today, as the U.S. dollar index was weaker and crude oil prices were higher. That did limit the downside in gold today. The bears still have the slight near term technical advantage in gold. A five week old downtrend is in place on the daily bar chart.

Natural gas [May contract] closed down 4.4 cents at $1.987 today. Prices closed near the session low again today and hit another fresh contract and 10 year low today. The bears have the solid overall near term technical advantage. There are no early clues to suggest a market low is close at hand.

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ONG: Crude Oil Weekly Technical Outlook For Saturday February 4th

Here is the weekly call from the great staff at Oil N Gold.......

Crude oil dipped to as low as 95.44 last week but formed a temporary there and recovered. Initial bias is neutral this week first. On the downside, below 95.44 will bring another decline but after all, we'd we'd expect strong support from 92.52 cluster support (38.2% retracement of 74.95 to 103.74 at 92.74). to contain downside and bring rebound. Meanwhile above 101.29 will be the first signal that recent consolidative trading has finished and flip bias back to the upside for a test on 103.74 resistance.

In the bigger picture, pull back from 114.83 was completed at 74.95 already and medium term rally from 33.2 is not finished yet. We'd tentatively treat rise from 74.95 as resumption of such rally. Sustained break of 114.83 will target 61.8% projection of 33.2 to 114.83 from 74.95 at 125.40. On the downside, though, break of 92.52 support will indicate that correction pattern from 114.83 is going to extend further with another falling leg to 74.95 and below before completion.

In the long term picture, crude oil is in a long term consolidation pattern from 147.27, with first wave completed at 33.2. The corrective structure of the rise from 33.2 indicates that it's second wave of the consolidation pattern. While it could make another high above 114.83, we'd anticipate strong resistance ahead of 147.24 to bring reversal for the third leg of the consolidation pattern.

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