Foreign Exchange Market Commentary

EUR/USD closed lower on Monday as it extends last Friday's decline below the 10-day moving average. The low-range close sets the stage for a steady to lower opening on Tuesday. Stochastics and the RSI have turned bearish signalling that sideways to lower prices are possible near-term. If it extends today's decline, the 20-day moving average crossing is the next downside target. Closes below the 20-day moving average crossing would confirm that a short-term top has been posted. If it renews this month's rally, the 62% retracement level of the December-March decline crossing is the next upside target.

USD/JPY closed lower on Monday due to short covering as it consolidates some of last week's rally. The mid-range close sets the stage for a steady opening on Tuesday. Stochastics and the RSI remain neutral to bullish signalling that sideways to higher prices are possible near-term. If it extends last week's rally, the reaction high crossing is the next upside target. Closes below the reaction low crossing would temper the near-term bullish outlook.

GBP/USD closed lower on Monday and spiked below the 20-day moving average crossing as it extended the decline off last week's high. A short covering rally tempered early losses and the mid-range close sets the stage for a steady opening on Tuesday. Stochastics and the RSI are bearish signalling that sideways to lower prices are possible near-term. Closes below the 20-day moving average crossing are needed to confirm that a short-term top has been posted. If it renews this month's rally, February's high crossing is the next upside target.

USD/CHF closed higher on Monday as it extends last Friday's rally above the 10-day moving average crossing. The mid-range close sets the stage for a steady opening on Tuesday. Stochastics and the RSI are turning bullish signalling that sideways to higher prices are possible near-term. Closes above the 20-day moving average crossing are needed to confirm that a short-term bottom has been posted. If it renews this month's decline, the 62% retracement level of the December-March rally crossing is the next downside target.

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