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ICE is below strong supports – NYMEX should go higher

Published Wednesday, May 7th, 2014

June ICE: The picture on this contract seems relatively simple. The 45.50 range support was tested yesterday but not closed below. It has been broken below this morning. In other words the contract is shaping up to go lower. It is not certain yet but the signs are there. Should the aforementioned 45.50 support be settled below the next downside target will be green-lighted. This is 41.75 and is the monthly high in January 2010. Below that we have the 61.8% retracement level of the August 2009-March 2013 uptrend from 18.20 to 76.15 – it is at 40.35. These are the levels the contract should be heading to if 45.50 were settled below. If the current weakness reverses during the course of the day and 45.50 were closed over then another test of the 8-day M/A will be expected. 

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Posted by Tamas Varga

Tamas Varga has been in the oil industry since 1992 and with PVM for 18 years. During his time in the industry he has gathered a range of experience in the oil markets. At PVM Tamas is in charge of data collection and analysis.