Foreign Exchange Market Commentary

EUR/USD closed lower on Wednesday and below the 10-day moving average crossing signalling that a short-term top has been posted. The low-range close sets the stage for a steady to lower opening on Friday. Stochastics and the RSI are neutral to bearish signalling that a short-term top might be in or is near. Closes below the 20-day moving average crossing are needed to confirm that a short-term low has been posted. If it renews this month's rally's, the 75% retracement level of the July-October decline crossing is the next upside target.

USD/JPY posted an inside day with a higher close on Wednesday but remains below the 20-day moving average crossing. The high-range close sets the stage for a steady to higher opening on Friday. Stochastics and the RSI remain 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

GBP/USD closed higher on Wednesday due to short covering as it consolidated some of this week's losses. The high-range close sets the stage for a steady to higher opening on Friday. Stochastics and the RSI are oversold but remain bearish signalling that sideways to lower prices are possible near-term. If it extends this week's decline, monthly support crossing is the next downside target. Closes above the 20-day moving average crossing would temper the near-term bearish outlook in the market. Closes above the reaction high crossing are needed to renew this month's rally.

USD/CHF closed higher due to light profit taking on Wednesday as it consolidated some of Monday's decline. The high-range close sets the stage for a steady to higher opening on Friday. Stochastics and the RSI are diverging but remain bearish signalling that sideways to lower prices are possible near-term. If it extends this month's deckine, the 87% retracement level of this summer's rally crossing is the next downside target. Closes above the 10-day moving average crossing would temper the near-term friendly outlook in the market.

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