Market Commentary

MARKET COMMENTARY ON 18TH MAY 2009

GBP/USD closed lower due to profit taking on Friday. The low-range close sets the stage for a steady to lower opening on Monday. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near-term. If June extends the rally off April's low, December's high crossing at 1.5545 is the next upside target. Closes below the 20-day moving average crossing at 1.4918 would signal that a short-term top has been posted.

EUR/USD closed sharply lower due to profit taking on Friday and below the 10-day moving average crossing at 1.3495 signaling that a double top with March's high might have been posted this week. The low-range close sets the stage for a steady to lower opening on Monday. Stochastics and the RSI are overbought and are turning neutral to bearish signaling that additional profit taking is possible near-term. Closes below the 20-day moving average crossing at 1.3325 would temper the near-term friendly outlook in the market. If June renews this month's rally, March's high crossing at 1.3700 is the next upside target.

USD/CHF closed sharply lower due to profit taking on Friday and below the 10-day moving average crossing signaling that a short-term top has likely been posted. The low-range close sets the stage for a steady to lower opening on Monday. Stochastics and the RSI are overbought and are turning bearish signaling that sideways to lower prices are possible near-term. Closes below the 20-day moving average crossing would confirm that a short-term top has been posted. If June extends the rally off April's low, the 75% retracement level of last fall's rally crossing is the next upside target.

USD/CAD closed lower on Friday as it extended this week's decline below the 10-day moving average crossing. The low-range close sets the stage for a steady to lower opening on Monday. Stochastics and the RSI remain bearish signaling that sideways to lower prices are possible near-term. Closes below the 20-day moving average crossing would confirm that a short-term top has been posted.

USD/JPY closed higher on Friday as it extended this week's rally. The high-range close sets the stage for a steady to higher opening on Monday. Stochastics and the RSI are becoming overbought but remain bullish signaling that sideways to higher prices are possible near-term. If June extends this week's rally, March's high crossing at 99.25 is the next upside target. Closes below the 20-day moving average crossing at 93.10 would confirm that a short-term top has been posted.