Thursday September 23, 2010 - 04:02:02 GMT
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Forex Hound - www.forexhound.com
Crude Oil No Longer Attached to Euro
The current weak action in November Crude Oil clearly proves
that it has detached itself from the Euro and is now realigning with the U.S. economy.
This could prove to be a bearish combination should the U.S. economy continue
to weaken as forecast by the Federal Reserve.
Technically, crude oil is trading in the middle of the last
main range of 71.49 to 78.86. This retracement zone is 75.18 to 74.31. A
breakout in either direction over these retracement levels is likely to trigger
an acceleration in that direction.
Also hemming this market in is a pair of Gann angles.
Currently, crude oil is walking down a Gann angle at 75.36. This angle has been
serving as resistance. Additional resistance is coming from another downtrending
Gann angle at 75.16. The support angle is at 73.99 today.
Last week the main trend turned down on the daily chart when
the market broke a swing bottom at 75.24. The lack of follow-through to the
downside, however, signaled that this market was not ready to break. Traders
instead chose to sell rallies.
A shift out of risky assets could be the catalyst behind a
sell-off this week. If the stock market begins to make a sharp turn South, then
look for it to take crude oil with it.
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