Currency Market Analysis For Thursday January 12th

The March Dollar closed lower on Thursday and the low range close sets the stage for a steady to lower opening on Friday. Stochastics and the RSI are overbought but are turning bearish signaling that a short term top might be in or is near. Closes below last Tuesday's low crossing at 79.83 would confirm that a short term top has been posted. If March extends the rally off last fall's low, the 62% retracement level of the 2010-2011 decline on the weekly continuation chart crossing at 82.89 is the next upside target. First resistance is Monday's high crossing at 81.85. Second resistance is the 62% retracement level of the 2010-2011 decline on the weekly continuation chart crossing at 82.89. First support is last Tuesday's low crossing at 79.83. Second support is the reaction low crossing at 79.83.

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The March Euro closed higher due to short covering on Thursday as it consolidates some of the decline off last year's high. The high range close sets the stage for a steady to higher opening on Friday. Stochastics and the RSI are oversold but remain neutral to bearish signaling that additional weakness is possible near term. If March extends the decline off October's high, the 75% retracement level of the 2010-2011 rally on the weekly continuation chart crossing at 126.39 is the next downside target. Closes above the 20 day moving average crossing at 129.45 are needed to confirm that a short term low has been posted. First resistance is the 10 day moving average crossing at 128.53. Second resistance is the 20 day moving average crossing at 129.45. First support is Wednesday's low crossing at 126.64. Second support is the 75% retracement level of the 2010-2011 rally on the weekly continuation chart crossing at 126.39.

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The March British Pound closed higher due to short covering on Thursday as it consolidated some of the decline off October's high. The high range close sets the stage for a steady to higher opening on Friday. Stochastics and the RSI are oversold but remain bearish signaling that sideways to lower prices are possible near term. If March extends the aforementioned decline, October's low crossing at 1.5267 is the next downside target. Closes above the 20 day moving average crossing at 1.5508 are needed to confirm that a short term low has been posted. First resistance is the 20 day moving average crossing at 1.5508. Second resistance is the reaction high crossing at 1.5663. First support is today's low crossing at 1.5270. Second support is October's low crossing at 1.5267.

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The March Swiss Franc closed higher due to short covering on Thursday. The high range close sets the stage for a steady to higher opening on Friday. Stochastics and the RSI are turning bullish signaling that sideways to higher prices are possible near term. Closes above the reaction high crossing at .10839 are needed to confirm that a low has been posted. If March renews the decline off October's high, weekly support crossing at .10422 is the next downside target. First resistance is the reaction high crossing at .10768. Second resistance is the reaction high crossing at .10839. First support is Monday's low crossing at .10431. Second support is weekly support crossing at .10422.

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The March Canadian Dollar closed slightly higher on Thursday however; the low range close sets the stage for a steady to lower opening on Friday. Stochastics and the RSI are neutral to bearish signaling that sideways to lower prices are possible near term. If March renews last week's decline, December's low crossing at 95.73 is the next downside target. If March renews the rally off December's low, December's high crossing at 99.23 is the next upside target. First resistance is last Tuesday's high crossing at 99.08. Second resistance is December's high crossing at 99.23. First support is Monday's low crossing at 96.75. Second support is December's low crossing at 95.73.

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The March Japanese Yen closed slightly higher on Thursday however; the high range close sets the stage for a steady to higher opening on Friday. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near term. Closes below the 20 day moving average crossing at .12928 would temper the near term friendly outlook. If March extends the rally off December's low, the reaction high crossing at .13101 is the next upside target. First resistance is last Tuesday's high crossing at .13070. Second resistance is the reaction high crossing at .13101. First support is the 20 day moving average crossing at .12928. Second support is the reaction low crossing at .12833.