Tuesday, October 26, 2010

Daily Forex Forecast Outlook

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The December Dollar was slightly higher due to short covering overnight but remains below the 10-day moving average. Stochastics and the RSI remain neutral to bullish signaling that sideways to higher prices are possible near-term. Multiple closes above last Wednesday's high crossing at 78.61 are needed to confirm that a short-term low has been posted. If December renews this summer's decline, the 87% retracement level of the 2009-2010-rally on the weekly continuation chart crossing at 76.07 is the next downside target. First resistance is last Wednesday's high crossing at 78.61. Second resistance is the reaction high crossing at 78.90. First support is last Friday's low crossing at 75.85. Second support is the November 2009 low on the weekly continuation chart crossing at 74.21.

The December Euro was lower overnight but remains above the 20-day moving average crossing at 138.740. Stochastics and the RSI are neutral signaling that sideways trading is possible near-term. Multiple closes below last Wednesday's low crossing at 136.880 would confirm that a short-term top has been posted. If December renews the rally off August's low, the 75% retracement level of the November-June decline crossing at 142.952 is the next upside target. First resistance is the reaction high crossing at 141.560. Second resistance is the 75% retracement level of the November-June decline crossing at 142.952. First support is last Wednesday's low crossing at 136.880. Second support is the reaction low crossing at 133.770.

The December British Pound was sharply higher overnight and is trading above the 20-day moving average. Stochastics and the RSI are turning neutral to bullish hinting that a short-term low might be in or is near. Closes above the 20-day moving average crossing at 1.5833 would confirm that a short-term low has been posted. If June resumes this month's decline, September's low crossing at 1.5284 is the next downside target. First resistance is the overnight high crossing at 1.5891. Second resistance is this month's high crossing at 1.6100. First support is last Wednesday's low crossing at 1.5641. Second support is the reaction low crossing at 1.5494.

The December Swiss Franc was lower overnight as it consolidates below the 20-day moving average crossing at .10351. Stochastics and the RSI remain bearish signaling that sideways to lower prices are possible near-term. If December extends last Friday's decline, the 25% retracement level of the May-October rally crossing at .10094 is the next downside target. Closes above the 10-day moving average crossing at .10369 would temper the bearish outlook. First resistance is the 10-day moving average crossing at .10369. Second resistance is this month's high crossing at .10572. First support is last Friday's low crossing at .10202. Second support is the 25% retracement level of the May-October rally crossing at .10094.

The December Canadian Dollar was lower overnight as it consolidates some of Monday's rally. However, stochastics and the RSI are turning bullish signaling that a short-term low might be in or is near. Closes above the 10-day moving average crossing at 98.02 would temper the bearish outlook. If December extends the decline off last week's high, the 62% retracement level of the August-October rally crossing at 96.02 is the next downside target. First resistance is the 10-day moving average high crossing at 98.02. Second resistance is this month's high crossing at 100.05. First support is last Tuesday's low crossing at 96.25. Second support is the 62% retracement level of the August-October rally crossing at 96.02.

The December Japanese Yen was lower due to profit taking overnight as it consolidates some of Monday's rally. Stochastics and the RSI are overbought and 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 .12193 would confirm that a short-term top has been posted. If December extends this year's rally into uncharted territory, upside targets will be hard to project. First resistance is Monday's high crossing at .12442. First support is the 10-day moving average crossing at .12303. Second support is the 20-day moving average crossing at .12193.

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