Foreign Exchange Market Commentary – Daily 08.30.2010
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EUR/USD closed higher due to short covering on Thursday as it consolidates some of the decline off this month’s high. The mid-range close sets the stage for a steady opening on Friday. Stochastics and the RSI are oversold but remain neutral to bearish signalling that additional weakness is possible near-term. If it extends this month’s decline, the reaction low crossing is the next downside target. Closes above the 20-day moving average crossing would temper the bearish outlook.
USD/JPY closed lower on Thursday as it consolidated some of Wednesday’s rally. The low-range close sets the stage for a steady to lower opening on Friday. Stochastics and the RSI are diverging but are turning neutral to bearish signalling that sideways to lower prices are possible near-term. Closes above the 20-day moving average crossing are needed to confirm that a short-term low has been posted.
GBP/USD closed higher due to short covering on Thursday as it consolidated some of this month’s decline. The mid-range close sets the stage for a steady opening on Friday. Stochastics and the RSI are oversold but remain neutral to bearish signalling that additional weakness is possible near-term. If it extends this month’s decline, the reaction low crossing is the next downside target. Closes above the 20-day moving average crossing would temper the near-term bearish outlook.
USD/CHF closed lower on Thursday as it extends this summer’s decline. The low-range close sets the stage for a steady to lower opening on Friday. Stochastics and the RSI remain bearish signalling that sideways to lower prices are possible near-term. If it extends this summer’s decline, the 87% retracement level of the 2009-2010-rally crossing is the next downside target. Closes above the 20-day moving average crossing would confirm that a short-term low has been posted.
