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Thursday, May 10, 2007

US TECHS: Commodities Outlook; Gold and Oil

[Gold] has tested important multiple time frame supports at $674-75 today, backed up by major trendlines at $662.50-67.50. Inside week and month structure is in place and Trend Intensity has been slow to trigger any new trend signal of late. Still-bullish monthly trends are vulnerable below $675.

50-day simple moving averages at $674 were tapped at the day's lows. Momentum divergences have played out perfectly in this market so far, and a test of those major trendlines noted above is increasingly likely. Intraday resistance is distant at $681.

In [oil], bearish trend signals on Trend Intensity were reinvigorated with yesterday's break, though prices rebounded to midrange levels on the day by the close. The reaching of major supports in the $59-60 band has been a challenge, with developments in Nigeria helping keep the market from following through to the downside. Daily trends stay bearish below $61.70 Jun today, and weeklies are on track for a bearish shift next week.

Important monthly trends turned bullish at the end of April and lose that status if below $64.45 at this month's close. Daily resistance at $62.50 has already been tested at the highs today and has held but a push past would leave bears more vulnerable in the short term with prices then targeting $63.50 Jun.

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