Foreign Exchange Market Commentary

EUR/USD closed higher on Tuesday but remains below the 10-day moving average crossing signalling that the corrective rally off August's low appears to have ended. The mid-range close sets the stage for a steady opening on Thursday. Stochastics and the RSI are turning neutral to bearish hinting that additional weakness is possible near-term. Closes below the reaction low crossing would renew the decline off August's high. If it extends last week's rally, the reaction high crossing is the next upside target.

USD/JPY closed higher on Wednesday and the high-range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI are bullish signalling that sideways to higher prices are possible near-term. Closes above the reaction high crossing are needed to confirm that a short-term top has been posted.

GBP/USD closed higher on Wednesday as it extents the 38% retracement level of the May-August rally crossing. The high-range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI are turning bullish hinting that a short-term low might be in or is near. Closes above the 20-day moving average crossing would temper the near-term bearish outlook. If it extends last month's decline, the reaction low crossing is the next downside target.

USD/CHF closed higher on Wednesday as it extends this summer's rally. The high-range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI are turning neutral to bearish signalling that at the very least a correction is possible. Closes above the 20-day moving average crossing would confirm that a short-term bottom has been posted. If it extends this summer's rally, the 2009 high crossing is the next upside target.