FOREX TRADING

EUR/USD closed lower due to profit taking on Wednesday but remains above the 10-day moving average crossing. The low-range close sets the stage for a steady to lower opening on Thursday. Stochastics and the RSI are diverging but are bullish signalling that additional short-term gains are possible. If it extends the rally off June’s low, the 38% 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/JPY closed higher due to short covering on Wednesday. The low-range close sets the stage for a steady to lower opening on Thursday. Stochastics and the RSI are bullish signalling that sideways to higher prices are possible. If it extends Tuesday’s rally, the reaction high crossing is the next upside target. Closes below last Friday’s low crossing are needed to renew this year’s decline.

GBP/USD closed higher due to profit taking on Wednesday as it consolidates some of the rally off May’s low. The low-range close sets the stage for a steady to lower opening on Thursday. Stochastics and the RSI are overbought but remain bullish signalling that sideways to higher prices are possible near-term. If it extends the aforementioned rally, the 62% 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 due to short covering on Wednesday but remains below the 20-day moving average crossing. The mid-range close sets the stage for a steady opening on Thursday. Stochastics and the RSI remain bearish signalling that sideways to lower prices are possible near-term. If it extends Tuesday’s decline, the 25% retracement level of the June-July rally crossing is the next downside target. Closes above last Thursday’s high crossing are needed to renew the aforementioned rally.