Foreign Exchange Market Commentary

SIGNAL GRATIS@. EUR/USD posted an inside day with a higher close on Tuesday due to short covering. The mid-range close sets the stage for a steady opening on Wednesday. Stochastics and the RSI are neutral to bullish signalling that a low might be in or is near. Closes above the 20-day moving average crossing are needed to confirm that a short-term low has been posted. If it renews this month's decline, the 75% retracement level of the July-November rally crossing is the next downside target.

USD/JPY closed lower on Tuesday as it consolidated some of Monday's rally. Stochastics and the RSI are bearish hinting that a short-term top might be in or is near. The mid-range close sets the stage for a steady opening on Wednesday. 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, November's high crossing is the next upside target.

GBP/USD closed lower on Tuesday and below the early-December low. The low-range close sets the stage for a steady to lower opening on Wednesday. Stochastics and the RSI 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 10-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 lower due to light profit taking on Tuesday as it consolidated some of Monday's rally. The mid-range close sets the stage for a steady opening on Wednesday. Stochastics and the RSI are bullish signalling that sideways to higher prices are possible near-term. If it extends this month's rally, the 87% retracement level of this summer's decline crossing is the next upside target. Closes below the 10-day moving average crossing would temper the near- term friendly outlook in the market.

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