The financial markets remain adverse to risk and there is little reason for expect relief while facing the US “fiscal cliff” and its potentially disastrous impact on the markets and economy. The weak Eurozone data added to pressure. The European and commodity currencies are falling further. The Asian stock markets fell. The European bourses are down and the US stock markets are lower in pre-open trading. Gold, oil and silver are down as well

The short-term outlook for most European and commodity currencies is slightly bearish. The medium-term outlook for most of the foreign currencies is sideways. The LGR short-term model is short on most foreign currencies. Good luck!


Overnight

  • UK: The RICS housing price balance improved to -7% in October from -14% in September.

  • Australia: The National Australia Bank's business confidence slipped to -1.0 in October from flat in September.

  • Japan: Final industrial production declined 4.1% in September.

  • Eurozone: The ZEW survey of economic sentiment fell to -2.6 in November from -1.4 in October.

  • Germany: The ZEW survey of economic sentiment fell to -15.7 in November from -11.5 in October. The current situation fell to 5.4 from 10.0.

  • France: Current account fell to EUR3.3 billion in September from EUR3.6 billion in August.

  • Switzerland: Producer and import prices climbed 0.4% year-on-year in October, after increasing 0.3% in September.

  • Italy: The harmonized index of consumer prices increased 2.8% year-on-year in October after growing 3.4% in September.

  • UK: The CPI slowed to 0.1% in October from 0.4% in September


Today's economic calendar

  • No data


EUR – December

The LGR Model: Short since October 19

The oversold December euro resumed losses and opens at an over two-month low in the US. It is trading well below the 100-day exponential moving average. The euro peaked near a four-month high on September 17 and bottomed at an over two-year low in July.

The short-term outlook is bearish. The medium-term outlook is sideways and my model is short. Immediate support is at 1.2625. Further support is at 1.2545.

Initial resistance is at 1.2745. The 100-day exponential moving average resists at 1.2799 and the 21-day exponential moving average caps at 1.2848.

INDICATORS

Fast stochastics: Bearish

MACD: Bearish

Ichimoku: Bearish

OUTLOOK

NEAR-TERM: Bearish

MEDIUM-TERM: Sideways

LONG-TERM: Sideways


JPY – December

The LGR Model: Short since September 28

The December Japanese yen reversed from a three-day low and opens above around the 21-day exponential moving average. It spiked to a three-week high on Friday. The yen had bottomed at a four-month low on October 26 and had peaked at a seven-month high on September 13.

The short-term outlook is sideways. The medium-term outlook is sideways my model is short. Initial resistance is at 1.2650. Further resistance is at 1.2705.

Immediate support is at 1.2555. Further support is at 1.2475. A pivot low is at 1.2399.

INDICATORS

Fast stochastics: Bullish

MACD: Slightly bullish

Ichimoku: Sideways

OUTLOOK

NEAR-TERM: Sideways

MEDIUM-TERM: Sideways

LONG-TERM: Sideways


GBP – December

The LGR Model: Short since November 7

The December pound reversed from an over two-month low and opens flat in the US. It trades below the 200-day exponential moving average. The pound marked a new high for the uptrend on September and bottomed at a 4 1/2-month low on June 1.

The short-term outlook is sideways to slightly bearish. The medium-term outlook is sideways and my model is long.

Initial support is at 1.5820. Further support is at 1.5700.

Immediate resistance is at 1.5935. The 21-day exponential moving average resists at 1.6001.

INDICATORS

Fast stochastics: Bearish

MACD: Slightly bearish

Ichimoku: Slightly bearish

OUTLOOK

NEAR-TERM: Sideways to slightly bearish

MEDIUM-TERM: Sideways

LONG-TERM: Sideways


CHF – December

The LGR Model: Short since October 19

The December Swiss franc sank further and opens at an over two-month low in the US. It is trading well below the 21-day exponential moving average. The franc peaked at a high for the uptrend on October 17 and bottomed at a 19-month low on July 24.

The short-term outlook is bearish. The medium-term outlook is sideways my model is short. Initial support is at 1.0500. Further support is at 1.0413.

Immediate resistance is at 1.0585. The 21-day exponential moving average resists at 1.0644. Distant resistance is at 1.0787.

INDICATORS

Fast stochastics: Bearish

MACD: Bearish

Ichimoku: Bearish

OUTLOOK

NEAR-TERM: Bearish

MEDIUM-TERM: Sideways

LONG-TERM: Sideways


CAD – December

The LGR Model: Short since September 17

The December Canadian dollar opens just below the 200-day exponential moving average after sliding to a two-month low on Friday. It is trading below the 21-day exponential moving average. The Canadian dollar had marked a high for the uptrend on September 14 and bottomed on June 1.

The short-term outlook is sideways to slightly bearish. The medium-term outlook is sideways and my model is short.

Immediate support is at .9959. Further support is at .9900.

The 21-day exponential moving average caps at 1.0042. Further resistance is at 1.0155.

INDICATORS

Fast stochastics: Bearish

MACD: Sideways

Ichimoku: Bearish

OUTLOOK

NEAR-TERM: Sideways to slightly bearish

MEDIUM-TERM: Sideways

LONG-TERM: Sideways


AUD – December

The LGR Model: Long since October 16

The December Australian dollar opens a little lower after struggling up on Monday. The reversal on November 7 likely formed a bearish reversal pattern (hangman). The Aussie is trading above the 21-day exponential moving average. This leg of the uptrend started on June 4. The Aussie marked a high for the uptrend on September 14.

The short-term outlook is sideways to slightly bearish. The medium-term outlook is bullish and my model is long.

The 21-day exponential moving average supports at 1.0333 and the 100-day exponential moving average at 1.0244. Distant support is at 1.0160.

A short-term top is at 1.0446. The top of the uptrend is 1.0537.

INDICATORS

Fast stochastics: Sideways

MACD: Slightly bullish

Ichimoku: Slightly bullish

OUTLOOK

NEAR-TERM: Sideways

MEDIUM-TERM: Bullish

LONG-TERM: Sideways