Foreign Exchange Market Commentary

EUR/USD closed lower on Tuesday and spiked below the 87% retracement level of the 2007-2008-rally crossing. The mid-range close sets the stage for a steady to lower opening on Wednesday. Stochastics and the RSI are diverging but are turning neutral to bearish signalling that sideways to lower prices are possible near-term. If it extends this summer's decline, January's low crossing is the next downside target. Closes above the 20-day moving average crossing are needed to confirm that a short-term top has been posted.

USD/JPY gapped up and closed higher on Tuesday and above the 87% retracement level of the 2007-2008-decline crossing. The mid-range close sets the stage for a steady to higher opening on Wednesday. Stochastics and the RSI are diverging but are turning bullish signalling that additional gains are possible near-term. If it extends this summer's rally, last September's high crossing is the next upside target. Closes below the 20-day moving average crossing are needed to confirm that a short-term top has been posted.

GBP/USD closed lower on Tuesday as it extended this month's decline. The low-range close sets the stage for a steady to lower opening on Wednesday. Stochastics and the RSI are oversold but remain neutral to bearish signalling that sideways to lower prices are possible near-term. If it extends this month's decline, monthly support crossing is the next downside target. Closes above the 20-day moving average crossing are needed to confirm that a short-term low has been posted.

USD/CHF closed higher on Tuesday and above the 87% retracement level of the 2007-2008-decline crossing. The mid-range close sets the stage for a steady to higher opening on Wednesday. Stochastics and the RSI are diverging but are turning bullish signalling that additional gains are possible near-term. If it extends this summer's rally, last September's high crossing is the next upside target. Closes below the 20-day moving average crossing are needed to confirm that a short-term top has been posted.

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