Euro flirts with contract highs

Crude (Nymex:CLM14)

After a brief “pop” at the end of last week, crude oil again sold off and found support at the previously mentioned Fibonacci Confluence Zone from 98.92 – 99.09. This area has served as relatively significant support in the past and could offer bullish traders a valid risk/reward trading opportunity on the long side of the market. Local resistance remains present at the 100.50 level as well as the 101.38 pivot on the chart, with longer term resistance coming in at the 102.06 – 102.21 area.

If near-term momentum can sustain a negative move below the previously mentioned support area from 98.92 – 99.09, look for potential downside follow-through to the 98.38 level and perhaps a retest of the 98.12 low from early April. All things considered, the 98.92 – 99.09 area appears to be the key area in the market for today’s session and, above here, there may be plausible buying opportunities. However, in the event of sustained weakness below the previously mentions support area, negative momentum will likely regain control of the market and continue to depress prices.

Crude Oil 30-minute Bar Chart (e-Signal)

Euro (CME:E6M14)

With the dollar continuing to struggle, the euro is now flirting with contract highs following this morning’s sizable rally. Price is currently looking to overcome the 13932 resistance pivot on the chart before setting its sights on previous highs around 13967. Both near-term momentum and the intermediate-term directional bias appear to favor a bullish argument in the euro and buying corrective pullbacks into support looks to be a high probability strategy to implement in this market.

Keep in mind that the market does appear to be trending so any pullbacks into the “moving average zone” created by the 20- and 50-period moving averages could also present a valid buying opportunity in the euro. As long as the dollar remains under pressure, look for the euro to continue to thrive and make new relative highs on the chart. The RSI is a bit overbought at these levels, so a brief rejection from the 13932 area would not be uncommon as price may need a slight pullback before continuing higher. All things considered, the technical outlook in the euro appears very bullish and the question now will become whether or not the euro can breakout above the previous peak around 13967.

Euro Currency 30-minute Bar Chart (e-Signal)


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