The appetite for risk improved on Thursday, as news that Germany’s Ifo report rose for a fourth consecutive month countered in the short term expectations for a mild recession in the Eurozone in 2012. Moreover, as I had told you in the past, investors are slowly returning to buying risk in search for much-needed yield. The euro and franc led the foreign currency futures higher. I had expected the former to establish short-term peaks on Thursday, but their strong performance pushed those expectations aside. The US stock indexes, oil, gold and silver closed higher. 

The short-term outlook for the major currencies is sideways. The medium-term outlook for most of the foreign currencies is sideways. The LGR short-term model is long euro and franc, and short yen, pound and commodity currencies.

 

Overnight:

  • US: Initial jobless claims were unchanged at 351,000 for the week after the previous week's figure was revised up from the 348,000 initially reported.
  • US: Housing price index was unchanged at +0.7% in December. 

 

Today's economic calendar:

  • Japan: Corporate service price for January

 

EUR – March

Luca Model: Long since February 17 
 
The March euro marched higher on Thursday and marked an over two-month high on the wings of the ongoing improvement in Germany’s Ifo survey. The euro managed to close above the 100-day exponential moving average and this sanctions sustained strength. It is now overbought in the short term.

The short-term outlook is sideways. The medium-term outlook is sideways and my model is long.
Initial resistance is at 1.3430. The 200-day exponential moving average caps at 1.3498.   
The 100-day exponential moving average supports at 1.3315. Further support is at 1.3270 and 1.3200. The 21-day exponential moving average supports at a distant 1.3162. 


INDICATORS

Fast stochastics: Bullish   
MACD: Slightly bullish
Ichimoku: Slightly bullish


OUTLOOK

NEAR-TERM: Sideways    
MEDIUM-TERM: Sideways
LONG-TERM: Sideways

JPY – March

Luca Model: Short since February 7           

The oversold March Japanese yen closed up in an inside range after falling since February 3 and hitting a seven-month low on Wednesday. It is testing the bottom of the channel declining since October 31. The short-term outlook is sideways. The medium-term outlook is bearish and my model is short.

Immediate resistance is at 1.2526. The next caps are 1.2610 and 1.2675. 
Initial support is at 1.2439. Further support is at 1.2353.


INDICATORS

Fast stochastics: Sideways 
MACD: Bearish (oversold)
Ichimoku: Bearish


OUTLOOK

NEAR-TERM: Sideways 
MEDIUM-TERM: Bearish  
LONG-TERM: Slightly bearish

GBP – March

Luca Model: Short since February 21         
 
The March pound closed up in an inside range after falling for two days. It is capped by the 21-day exponential moving average. The odds of forming a double-top pattern decreased considerably. It had peaked at a near three-month high in early February and branded a new low for the downtrend on January 13. 

The short-term outlook is sideways. The medium-term outlook is slightly bullish but my model is short.
Initial resistance is at 1.5765. Further resistance is at 1.5815. The top of the upmove is 1.5924. 
The 21-day exponential moving average supports at 1.5720. Further support is at 1.5625 and 1.5560.

INDICATORS

Fast stochastics: Sideways
MACD: Slightly bearish
Ichimoku: Sideways

OUTLOOK

NEAR-TERM: Sideways   
MEDIUM-TERM: Slightly bullish
LONG-TERM: Bearish

CHF – March

Luca Model: Long since February 20 

The March Swiss franc extended this week’s gains and marked an over three-month high on Thursday. It closed above the 100-exponential moving average for the first time in four months. The franc, which had marked a new low for the downtrend on January 9, is overbought. 

The short-term outlook is sideways. The medium-term outlook is sideways and my model is long.
The 200-day exponential moving average resists at 1.1123. Further resistance is at 1.1210.
The 100-day exponential moving average supports at 1.1001. Further support is at 1.0910. The 21-day exponential moving average supports at a distant 1.0898.
 


INDICATORS

Fast stochastics: Bullish 
MACD: Slightly bullish
Ichimoku: Bullish


OUTLOOK

NEAR-TERM: Sideways    
MEDIUM-TERM: Slightly bullish 
LONG-TERM: Sideways

CAD – March

Luca Model: Short since February 21 

The March Canadian dollar closed up above the 21-day exponential moving average in an inside range after falling for two days. It had marked a new high for the uptrend early this week. The 21-day exponential moving average is still providing support. The loonie has been trading in a choppy uptrend since Thanksgiving. 

The short-term outlook is sideways. The medium-term outlook is slightly bullish and my model is short.
A pivot high resists at 1.0090. Distant resistance is at 1.0170.
The 21-day exponential moving average supports at .9985 and the 200-day exponential moving average at .9928.


INDICATORS

Fast stochastics: Sideways
MACD: Slightly bearish
Ichimoku: Bullish


OUTLOOK

NEAR-TERM: Sideways   
MEDIUM-TERM: Slightly bullish
LONG-TERM: Sideways

AUD – March

Luca Model: Short since February 14  

The March Australian dollar reversed from a three-week low and ended above the 21-day exponential moving average. The Aussie had been entrenched in an uptrend since Thanksgiving, but is now trading below the rising trendline. 
The short-term outlook is sideways. The medium-term outlook is barely bullish but my model is short.

Thursday high is 1.0694. The top of the uptrend is 1.0795. 
The 21-day exponential moving average supports at 1.0605. Further support is at 1.0555 and 1.0470.


INDICATORS

Fast stochastics: Bullish
MACD: Slightly bearish    
Ichimoku: Sideways


OUTLOOK

NEAR-TERM: Sideways 
MEDIUM-TERM: Bullish
LONG-TERM: Bullish