Moving Averages


Crude Oil is currently holding above the 50 day moving average where it has found temporary Support. However, Oil is still trading below the 100 and 200 day MA’s, as they act as near term Resistance. Oil has not had a clean close above the 100 MA since late April. If the 200 MA crosses above the 100 MA that will align the major MA’s in the order associated with falling prices, thereby putting Oil under further pressure. Though, a clean close above the 100 MA and an 80 handle could just as easily turn things around.


We have spoken recently on how Gold has begun to trade weaker after price fell through the 50 day moving average. In addition, once it closed below major support near 1,196 it would fall further to test the 100 day MA as the 50 MA turns into near term Resistance. Yesterday’s price action tested the 100 MA after Gold has failed to retake the 50 MA on more than 10 prior attempts. All is not lost for the precious metal if the 100 MA can act as firm Support, however, a breach of that level coupled with a clean close below 1,180 may have Gold testing levels near the 200 MA.


The EUR breached the 100 day MA for the first time since December 2009. It is a significant breach but price action is held up by the psychologically important level of 1.30. Most likely if price would have crossed the 100 MA at 1.26 ensuing price action would have push the EUR quickly to our current spot. However, with such an important level just north of the 100 MA traders are a bit more reserve in their move. Though, it would seem that this breach coupled with a close above 1.30 should provide the necessary momentum to take the EUR significantly higher, perhaps even to the 200 MA. If the EUR can not crack 1.30 and it falls back below the 100 MA it may retrace towards the 50 MA before trying again.

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