FOREX TRADING

EUR/USD closed higher on Monday as it consolidates above the 10-day moving average crossing. The high-range close sets the stage for a steady to higher opening on Tuesday. However, stochastics and the RSI have turned bearish hinting 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 top has been posted. If it renews the rally off June’s low, the 38% retracement level of the 2009-2010-decline crossing s the next upside target.

USD/JPY closed lower due to profit taking on Monday. The low-range close sets the stage for a steady to lower opening on Tuesday. Stochastics and the RSI are diverging and are turning bearish hinting that a short-term top might be in or is near. Close below the 20-day moving average crossing would confirm that a short-term top has been posted. If it extends the rally off May’s low, last November’s high crossing is the next upside target.

GBP/USD closed higher on Monday and the mid-range close sets the stage for a steady opening on Tuesday. Stochastics and the RSI are turning neutral to bullish signalling that sideways to higher prices are possible near-term. If it resumes 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 lower on Monday and below the 10-day moving average crossing signalling that a short-term low is in or is near. The low-range close sets the stage for a steady to lower opening on Tuesday. Stochastics and the RSI are overbought, diverging and are turning bearish hinting 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 extends the rally off June’s low, the 75% retracement level of the 2009-2010-decline crossing is the next upside target.