Market Commentary - Tuesday, 27 February 2007

FOREIGN EXCHANGE

EUR/USD closed higher on Monday and above the retracement level of the Dec-Jan decline crossing thereby renewing this year's rally. The high range close sets the stage for a steady to higher opening on Tuesday. Closes below the 20-day moving average crossing would confirm that a short-term high has been posted.

USD/JPY closed lower on Monday as it consolidated some of last week's rally. The low range close sets the stage for a steady to lower opening on Tuesday. Stochastics and the RSI remain bullish signaling that sideways to higher prices are possible near-term. Closes above the 10-day moving average crossing would signal that a short-term low has been posted.

GBP/USD closed higher on Monday. The high-range close sets the stage for a steady to higher opening on Tuesday. Stochastics and RSI are neutral to bullish signaling that sideways to higher prices are possible near-term. Closes below the reaction low crossing are needed to confirm that a short-term top has been posted.

USD/CHF closed lower on Monday and the low-range close sets the stage for a steady to lower opening on Tuesday. Stochastics and the RSI are oversold and are turning bearish hinting that sideways to lower prices are possible near-term. Closes above the 20-day moving average crossing would signal that a short-term low has been posted.



BULLION

Gold closed higher on Monday as it extended last week's rally. The high-range close sets the stage for a steady to higher opening on Tuesday. Stochastics and the RSI are overbought, diverging but remain neutral to bullish signaling that sideways to higher prices are possible near-term. Close below the 20-day moving average crossing would confirm that a top has been posted. .

Silver closed higher on Monday. The high-range close sets the stage for a steady to higher opening on Tuesday. Stochastics and the RSI are overbought, diverging but remain neutral to bullish signaling that sideways to higher prices are possible near-term. Close below the 20-day moving average crossing would confirm that a top has been posted.



U.S. STOCK MARKET INDICES

DJI closed lower on Monday and the mid-range close sets the stage for a steady opening on Tuesday. Stochastics and RSI are overbought and are bearish signaling that a short-term top might be in or is near.

SPI closed lower on Monday. The mid-range close sets the stage for a steady opening on Tuesday. Closes below the 20-day moving average crossing would confirm that short-term has been posted. Stochastics and the RSI remain bullish signaling that sideways to higher prices are possible near-term.

NDI closed lower on Monday and the mid-range close sets the stage for a steady opening on Tuesday. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near-term.



ENERGY

Crude oil closed higher on Monday. The high-range close sets the stage for a steady to higher opening on Tuesday. Stochastics and the RSI have turned bullish signaling that sideways to higher prices are possible near-term. Closes below the 10-day moving average crossing would signal that a high has been posted.

Natural Gas closed lower on Monday and the mid-range close sets the stage for a steady opening on Tuesday. Stochastics and the RSI are overbought but remain bullish signaling that sideways to higher prices are possible near-term. Closes below the reaction low crossing would confirm that a short-term high has been posted.



COFFEE

Coffee closed down 125 points on Monday. Prices closed nearer the session low on a corrective pullback after solid gains last week. Bulls still have some upside technical momentum, amid the recent rallies in many commodity markets. Stochastics and the RSI are neutral signaling that sideways prices are possible near-term.