Foreign Exchange Market Commentary

EUR/USD closed higher on Wednesday due to short covering as it consolidated some of Monday's decline. . The mid-range close sets the stage for a steady opening on Thursday. Stochastics and the RSI are oversold but are neutral to bearish signalling that additional weakness is possible near-term. If it extends this month's decline, weekly 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/JPY closed lower on Wednesday as it extends this month's decline. Profit taking tempered early gains and the mid-range close sets the stage for a steady opening on Thursday. Stochastics and the RSI remain bearish signalling that sideways to lower prices are possible near-term. If it extends the decline off August's high, March's low crossing is the next downside target. Closes above the 20-day moving average crossing are needed to confirm that a short- term bottom has been posted

GBP/USD posted a key reversal down on Wednesday and closed below September's low crossing. The low-range close sets the stage for a steady to lower opening on Thursday. Stochastics and the RSI are oversold but remain bearish signalling that additional weakness is possible near-term. Today's below September's low crossing opens the door for a possible test of the 2005 low crossing. Closes above the 20-day moving average crossing would confirm that a short-term low has been posted.

USD/CHF closed lower on Wednesday due to short covering as it consolidates some of Monday's rally. The low-range close sets the stage for a steady to lower opening on Thursday. Stochastics and the RSI are oversold but remain neutral to bullish signalling that additional weakness is possible near-term. If it extends this week's rally, last October's high crossing is the next upside target. Closes below the 20-day moving average crossing are needed to confirm that a short-term high has been posted.

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