Foreign Exchange Market Commentary

EUR/USD closed lower on Thursday as it consolidated some of the rally off June's low. The low-range close sets the stage for a steady to lower opening on Friday. Stochastics and the RSI are turning neutral hinting that a short-term top might be in or is near. Closes above the reaction high crossing are needed to confirm that a short-term low has been posted. If it renews the decline off June's high, the reaction low crossing is the next downside target.

USD/JPY closed higher on Thursday ending a three-day decline. The high-range close sets the stage for a steady to higher opening on Friday. Despite today's rally, stochastics and the RSI remain bearish hinting that a short-term top might be in or is near. Closes below the 20-day moving average crossing would temper the near-term friendly outlook in the market. If it renews last week's rally, the reaction high crossing is the next upside target.

GBP/USD closed lower due to profit taking on Thursday as it extended Tuesday's decline. The mid-range close sets the stage for a steady opening on Friday. Stochastics and the RSI are bearish hinting 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 off April's low, the 62% retracement level of the 2008-2009 decline crossing is the next upside target.

USD/CHF posted an inside day with a lower close on Thursday as it consolidates some of the rally off last week's low. The mid-range close sets the stage for a steady opening on Friday. Stochastics and the RSI are neutral to bullish signalling that sideways to higher prices are possible near-term. If it extends the rally off last week's low, June's high crossing is the next upside target. Closes below last week's low crossing would confirm that a short-term top has been posted.

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