Foreign Exchange Market Commentary

EUR/USD closed lower on Wednesday ending a two-day correction off last Friday's low. The low-range close sets the stage for a steady to lower opening on Thursday. Stochastics and the RSI are oversold, diverging 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 ending a two-day correction off last week's low. The low-range close sets the stage for a steady to lower opening on Thursday. Despite today's decline, stochastics and the RSI have turned bullish signalling that a short-term bottom might be in or is near. Closes above the 20-day moving average crossing are needed to confirm that a short-term bottom has been posted. If it renews the decline off August's high, March's low crossing is the next downside target.

GBP/USD closed lower on Wednesday due to profit taking ending a two-day short covering rally off last Friday's low. The low-range close sets the stage for a steady to lower 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 are needed to confirm that a short-term low has been posted. If it renews this month's decline, the 62% retracement level of the 2001-2007-rally crossing is the next downside target.

USD/CHF closed higher on Wednesday as it consolidates above the 10-day moving average crossing. The high-range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI are oversold and are neutral to bullish signalling that sideways to higher prices are possible near-term. If it extends this month'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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