Foreign Exchange Market Commentary

EUR/USD closed lower on Tuesday due to profit taking as it consolidated some of Monday's rally but remains above the 10-day moving average crossing. The mid-range close sets the stage for a steady opening on Wednesday. Stochastics and the RSI are turning bullish signaling that sideways to higher prices are possible near-term. Closes above the reaction high crossing are needed to confirm that a short-term low has been posted. If it renews this fall's decline, weekly support crossing is the next downside target.

USD/JPY closed lower on Tuesday as it extends the decline off November's high. The low-range close sets the stage for a steady to lower opening on Wednesday. Stochastics and the RSI are overbought and are turning bullish hinting that a short-term bottom might be in or is near. Closes above the reaction high crossing are needed to confirm that a short-term bottom has been posted. If it extends the decline, October's low crossing is the next downside target.

GBP/USD closed lower on Tuesday as it consolidated some of Monday's rally. The low-range close sets the stage for a steady to lower opening on Wednesday. Stochastics and the RSI are turning neutral hinting 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 renews this fall's decline, the 2001 low crossing is the next downside target.

USD/CHF closed higher on Tuesday and the low-range close sets the stage for a steady to lower opening on Wednesday. Stochastics and the RSI are neutral to bullish signalling that sideways to higher prices are possible near-term. If it renews last month's rally, weekly resistance crossing is the next upside target. Closes below the reaction low crossing are needed to confirm that a short-term high has been posted.

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