Foreign Exchange Market Commentary

EUR/USD closed lower on Thursday and below the 62% retracement level of the 2007-2008-rally crossing. The low-range close sets the stage for a steady to lower opening on Friday. Stochastics and the RSI are diverging but are turning bearish signalling that sideways to lower prices are possible near-term. If it extends this summer's decline, the 75% retracement level of the aforementioned rally 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 closed sharply lower on Thursday as it extends this week's decline. Stochastics and the RSI remain bearish signalling that sideways to lower prices are possible near-term. The low-range close sets the stage for a steady to lower opening on Friday. If it extends this week's decline, the reaction low crossing is the next downside target. Closes above the 20-day moving average crossing would confirm that a short-term bottom has been posted.

GBP/USD closed lower on Thursday as it extends this summer's decline. A short covering rally tempered early losses and the low-range close sets the stage for a steady to lower opening on Friday. 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 slightly higher on Thursday but remains below key resistance marked by the 62% retracement level of this year's decline crossing. A short covering decline tempered early gains and the mid-range close sets the stage for a steady opening on Friday. Stochastics and the RSI are neutral to bearish hinting that a short-term high might be in or is near. Closes below the 20-day moving average crossing are needed to confirm that a short-term high has been posted. If it extends this summer's rally the 75% retracement level of the aforementioned decline crossing is the next downside target.

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