Morning Currency Commentary

The December Dollar was higher overnight as it extended the short covering rally off last Friday’s low. Stochastics and the RSI are turning bullish hinting that a low might be in or is near. Closes above the 20-day moving average crossing at 80.67 are needed to confirm that a short-term low has been posted. If December extends the decline off July’s high, weekly support crossing at 78.55 is the next downside target. First resistance is the 10-day moving average crossing at 79.64. Second resistance is the 20-day moving average crossing at 80.67. First support is last Friday’s low crossing at 78.72. Second support is weekly support crossing at 78.55.

The December Euro was lower overnight as it consolidates some of the rally off July’s low. Stochastics and the RSI are turning bearish hinting that a short-term top might be in or is near. Closes below the 20-day moving average crossing at 127.71 would confirm that a short-term top has been posted. If December extends the rally off July’s low, the 50% retracement level of this year’s decline crossing at 132.52 is the next upside target. First resistance is the 50% retracement level of this year’s decline crossing at 132.52. Second resistance is the 62% retracement level of this year’s decline crossing at 135.32. First support is the 10-day moving average crossing at 129.69. Second support is the 20-day moving average crossing at 127.71.

The December British Pound was lower due to profit taking overnight as it consolidates some of this summer’s rally. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near-term. If December extends the rally off June’s low, the 87% retracement level of the 2011-2012-decline crossing at 1.6330 is the next upside target. Closes below the 20-day moving average crossing at 1.5994 would confirm that a short-term top has been posted. First resistance is Monday’s high crossing at 1.6268. Second resistance is the 87% retracement level of the 2011-2012-decline crossing at 1.6330. First support is the 10-day moving average crossing at 1.6140. Second support is the 20-day moving average crossing at 1.5994.

The December Swiss Franc was lower overnight as it consolidates some of the rally off July’s low. Stochastics and the RSI are overbought but are turning neutral to bearish hinting that a short-term top might be in or is near. Closes below the 20-day moving average crossing at .10593 would confirm that a short-term top has been posted. If December extends the rally off July’s low, the 75% retracement level of this year’s decline crossing at .10962 is the next upside target. First resistance is the 62% retracement level of this year’s decline crossing at .10816. Second resistance is the 75% retracement level of this year’s decline crossing at .10962. First support is the 10-day moving average crossing at .10712. Second support is the 20-day moving average crossing at .10593.

The December Canadian Dollar was lower overnight and trading below the 10-day moving average crossing at 102.36 signaling that a short-term top is in or is near. Stochastics and the RSI are bearish signaling that a short-term top might be in or is near. Closes below the 20-day moving average crossing at 101.62 are needed to confirm that a short-term top has been posted and would open the door for additional weakness near-term. If December renews the rally off June’s low, the July 2011 high crossing at 104.53 is the next upside target. First resistance is last Friday’s high crossing at 103.59. Second resistance is the July 2011 high crossing at 104.53. First support is the 20-day moving average crossing at 101.62. Second support is the reaction low crossing at 100.59.

The December Japanese Yen was higher due to short covering overnight as it consolidates some of the decline off last week’s high. Stochastics and the RSI remain neutral to bearish signaling that sideways to lower prices are possible near-term. If December extends the aforementioned decline, August’s low crossing at .12565 is the next downside target. Closes above the 10-day moving average crossing at .12795 would temper the near-term bearish outlook. From a broad perspective, September needs to close above .12895 or below .12416 to confirm a breakout of this summer’s trading range and point the direction of the next trending move. First resistance is last Thursday’s high crossing at .12977. Second resistance is the 87% retracement level of this year’s decline crossing at .13038. First support is Wednesday’s low crossing at .12631. Second support is August’s low crossing at .12565.

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