FOREX TRADING

EUR/USD closed higher due to short covering on Wednesday as it consolidates some of the decline off this month’s high. The high-range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI are turning bullish signalling that a short-term low is in or is near. Closes above the 20-day moving average crossing would temper the bearish outlook. If September renews last month’s decline, the reaction low crossing is the next downside target.

USD/JPY closed higher on Wednesday and the high-range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI are diverging but are turning neutral to bearish signalling that sideways to lower prices are possible near-term. Closes above Monday’s low crossing are needed to confirm that a short-term low has been posted.

GBP/USD closed higher due to short covering on Wednesday and the high-range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI are oversold but remain neutral to bearish signalling that additional weakness is possible near-term. If it extends last 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 higher on Wednesday as it extends this summer’s rally. Profit taking tempered early gains and the high-range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI remain neutral to bearish signaling that sideways to lower prices are possible near-term. If it extends this summer’s decline, the 2009 low crossing is the next downside target. Closes above the 20-day moving average crossing would confirm that a short-term low has been posted.

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