Foreign Exchange Market Commentary

EUR/USD closed lower on Friday as it extended yesterday's decline below the 50% retracement level of the 2008-2009-rally crossing. The mid-range close sets the stage for a steady to lower opening on Monday.

Stochastics and the RSI are oversold but remain neutral to bearish signalling that sideways to lower prices are possible near-term. If it extends this winter's decline, the 62% retracement level of the 2008-2009-rally crossing is the next downside target. Closes above the 20-day moving average crossing are needed to confirm that a short-term low has been posted.

USD/JPY posted an inside day with a higher close on Friday as it consolidated some of Thursday's decline. The mid-range close sets the stage for a steady opening on Monday. Stochastics and the RSI are turning neutral to bearish signalling that sideways to lower prices are possible near-term. If it extends this week's decline, the 62% retracement level of the November-January rally crossing is the next downside target. Closes above Wednesday's high crossing would confirm that a long-term bottom has been posted.

GBP/USD closed lower on Friday as it extends the decline off January's high. The mid-range close sets the stage for a steady to lower opening on Monday. Stochastics and the RSI are oversold but remain neutral to bearish signalling that sideways to lower prices are possible near-term. If it extends the decline off January's high, the 50% retracement level of 2009's rally crossing is the next downside target. Closes above the 20-day moving average crossing are needed to confirm that a short-term low has been posted.

USD/CHF closed higher on Friday as it extended yesterday's rally above the 38% retracement level of the 2008-2009-decline crossing. The mid-range close sets the stage for a steady opening on Monday. 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 rally off November's low, the 50% retracement level of the 2008-2009-decline crossing is the next upside target. Closes below the 20-day moving average crossing are needed to confirm that a long-term high has been posted.