Crude Oil Falls on Poor U.S. Durable Goods Report

October Crude Oil finished lower as selling pressure came in as the market approached the recent top at $107.95. A weaker-than-expected U.S. Durable Goods report contributed to the decline in prices as it signaled a sluggish economy. Although the report indicates the Fed is not likely to begin tapering its aggressive monetary stimulus program in September as widely expected, the dollar failed to break. Nonetheless, crude oil declined, perhaps signaling that investors believe a slowing economy will lead to a drop in demand.

The chart pattern suggests a move to $104.87 – $104.13 is likely. The main trend will change to down if $103.50 is violated. This could lead to an acceleration to the downside.

December gold traders tried to capitalize on the sideways U.S. Dollar, but could not hold on to its early session gains. Although the market broke through the psychological $1400.00 level, it failed to sustain the move as investors seemed unimpressed by its strength.

The market is now in a position to post a potentially bearish closing price reversal top on the daily chart. Initially, the market is likely to find near-term support on a Fibonacci level at $1372.88, however, a sustained move through this level could trigger a further decline to $1336.55.

Although the market looks weak today, a drop in the dollar could fuel a fast recovery. Now that $1400 has been penetrated, investors may have their eyes set on the early June top at $1426.00.

The EUR/USD posted an inside day on Monday. Europe was closed for a holiday, but when trading resumes on Tuesday, there is likely to be a bias to the upside because of the sluggish U.S. economy. If investors take Fed tapering off the table then look for the Forex pair to challenge the recent top at 1.2451.

The GBP/USD also posted an inside day following a 2-day sell-off. When trading resumes on Tuesday, Sterling traders will be focusing on the U.S. economy. While the U.K. economy is certainty not operating on all cylinders, it does appear to be on a steadier pace toward recovery than the U.S. economy.

The main trend is clearly up on the daily chart, but investors have been a little shy about buying so close to the June top at 1.5750. Holding 1.5538 will be a sign that buyers have re-emerged and that the current break from 1.5717 was only to alleviate the overbought condition.