FOREX TRADING

EUR/USD closed higher on Monday as it extends the rally off June’s low. The high-range close sets the stage for a steady to higher opening on Tuesday. Stochastics and the RSI are overbought but remain neutral to bullish signalling that sideways to higher prices are possible near-term. If it extends the aforementioned rally, the 38% retracement level of the 2009-2010-decline crossing is the next upside target.

USD/JPY posted an inside day with a higher close on Monday as it consolidates some of the decline off April’s high. 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. If it extends the decline off May’s high, last November’s low crossing is the next downside target. Multiple closes above the 20-day moving average crossing would confirm that a short-term bottom has been posted.

GBP/USD closed lower due to profit taking on Monday as it consolidated some of the rally off May’s low. The low-range close sets the stage for a steady to lower opening on Tuesday. Stochastics and the RSI are diverging but remain neutral to bullish signalling that additional gains are possible near-term. If it extends the rally off May’s low, the 50% retracement level of the 2009-2010-decline crossing is the next upside target. Closes below the 20-day moving average crossing are needed to confirm that a short-term top has been posted.

USD/CHF closed higher on Monday as it consolidated some of the decline off June’s high. The high-range close sets the stage for a steady to higher opening on Tuesday. Stochastics and the RSI are diverging but are neutral to bearish signalling that additional weakness is possible near-term. If it extends this month’s decline, the 75% retracement level of the 2009-2010-rally crossing is the next downside target. Closes above the 20-day moving average crossing are needed to confirm that a short-term bottom has been posted.