Foreign Exchange Market Commentary

EUR/USD closed higher on Monday and above the 10-day moving average crossing. The high-range close sets the stage for a steady to higher opening on Tuesday. Stochastics and the RSI are turning neutral to bullish signalling that sideways to higher prices are possible near-term. Closes above the reaction high crossin are needed to confirm that a short-term low has been posted. If it renews this fall's decline, weekly support crossin is the next downside target.

USD/JPY closed slightly higher on Monday due to short covering as it consolidates some of last Friday's decline. The high-range close sets the stage for a steady to higher opening on Tuesday. Stochastics and the RSI are overbought and are turning neutral to bearish signalling that a short-term top might be in or is near. Closes below the reaction low crossing are needed to confirm that a short-term top has been posted. If it extends the rally, October's high crossing is the next upside target.

GBP/USD closed higher on Monday as it consolidated some of last week's decline. The mid-range close sets the stage for a steady opening on Tuesday. Stochastics and the RSI are turning neutral signalling that a short-term low might be in or is near. Closes above the 10-day moving average crossing are needed to confirm that a short-term low has been posted. If it extends this fall's decline, the 2001 low crossing is the next downside target.

USD/CHF closed sharply lower on Monday and below the 10-day moving average crossing. The high-range close sets the stage for a steady to higher opening on Tuesday. Stochastics and the RSI are turning neutral signalling that sideways to lower prices are possible near-term. Closes below the reaction low crossing are needed to confirm that a short-term top has been posted.

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