The appetite for risk improved selectively on Wednesday, when the Federal Reserve repeated that it will continue to support the US economy with ultra-low interest rates and $85 billion a month in asset purchases on an open-ended basis. The European currencies advanced, while the Australian dollar slipped. Good regional data and poor US economic data boosted the euro further up. The Aussie was hunted by concerns that previous monetary policy easing has not boosted domestic demand. The US stock markets fell, but the gold, oil and silver advanced.

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

   

Overnight

  • US: The private sector employment increased by 192,000 jobs in January and the job growth in December was downwardly revised to 185,000 from 215,000 jobs that were originally reported. 
  • US: The GDP edged down 0.1% in the fourth quarter after surging 3.1% in the third quarter.
  • US: The Federal Reserve will continue to support the US economy with ultra-low interest rates and $85 billion a month in asset purchases on an open-ended basis.

Today's economic calendar

  • Japan: Nomura/ JMMA Manufacturing Purchasing Manager Index for January 
  • Japan: Industrial production for December  
  • Japan: Housing starts for December 
  • Australia: HIA new home sales for December 
  • UK: Gfk consumer confidence for January  

EUR – March

The LGR Model: Long since January 24        
 
The March euro extended recent gains to a 13-month high on Wednesday. The euro is trading in a short-term bullish flag targeting the 1.3750 area and in a medium-term bullish flag targeting the 1.4200. It is trading above the 21-day exponential moving. The euro bottomed at an over two-year low in July.
The short-term outlook is sideways. The medium-term outlook is slightly bullish and the LGR model is long.
Immediate resistance is at 1.3625. Further resistance is at 1.3670. 
Initial support is at 1.3505. Further support is at 1.3415. 

INDICATORS

Fast stochastics: Bullish
MACD: Bullish
Ichimoku: Bullish


OUTLOOK

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

JPY – March

The LGR Model: Short since January 24             
 
The oversold March Japanese yen ended off a 2 1/2-year low on Wednesday. The yen is trading below the neckline of a long-term head–and-shoulders pattern and the target is the 1.0500 area. It is trading well below the 21-day exponential moving average. The yen had peaked on September 13. 
The short-term outlook is sideways. The medium-term outlook is bearish and the LGR model is short.
Initial support is at 1.0925. Further support is at 1.0795.
Immediate resistance is at 1.1025. Further resistance is at 1.1075 and 1.1160. 

INDICATORS

Fast stochastics: Bearish
MACD: Bearish
Ichimoku: Bearish


OUTLOOK

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

GBP – March

The LGR Model: Long since January 30        

The March pound advanced for a second day and ended at a three-day high. The pound marked a new five-month low on Monday. It pierced the 61.8% Fibonacci retracement of the June-January uptrend. The pound is still approaching the bottom of a long-term (four-year) triangle in the 1.56 area; it is also aiming for the target of a double top in the 1.54 area. It is trading well below the 21-day exponential moving average and is oversold. The pound had marked a 17-month high on January 2 and bottomed on June 1.
The short-term outlook is sideways. The medium-term outlook is sideways and the LGR model is long.
Initial resistance is at 1.5835. Further resistance is at 1.5890. 
Immediate support is at 1.5750. Further support is at 1.5670 and 1.5625.

INDICATORS

Fast stochastics: Slightly bullish
MACD: Bearish
Ichimoku: Bearish


OUTLOOK

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

CHF – March

The LGR Model: Long since January 15        

The March Swiss franc rose to a 1 1/2-month high and closed above the 21-day exponential moving average. The franc is trading in a medium-term symmetrical triangle. It had marked a seven-month high on December 20 and a 19-month low on July 24.
The short-term outlook is sideways. The medium-term outlook is slightly bullish and the LGR model is long.
The top of the uptrend is at 1.1026. Further resistance is at 1.1065 and 1.1200.   
Initial support is at 1.0855. Further support is at 1.0795 and 1.0700.

INDICATORS

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


OUTLOOK

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

  

CAD – March

The LGR Model: Short since January 18        

The March Canadian dollar made little progress on Wednesday after rallying on Tuesday and reaching a six-month low on both Friday and Monday. It is trading below the 50% mark of the June-September uptrend. The loonie had peaked at a 2 ½-month high on January 11. The Canadian dollar had marked a high for the uptrend on September 14 and a significant bottom on June 1.
The short-term outlook is sideways. The medium-term outlook is sideways and the LGR model is short.
Immediate resistance is at .9985. Further resistance is at 1.0065.
Initial support is at .9870. Further support is at .9835 and .9735.

INDICATORS

Fast stochastics: Slightly bullish
MACD: Bearish
Ichimoku: Bearish


OUTLOOK

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

AUD – March

The LGR Model: Long since January 2        

The March Australian dollar was capped by the 21-day exponential moving average and fell on Wednesday. It is stuck within Tuesday’s range. The Aussie marked a 3 1/2-week low on Monday. The Aussie marked a new high for the uptrend on January 10.
The short-term outlook is sideways. The medium-term outlook is sideways and my model is long.
Initial support is at 1.0347. Further support follows at 1.0280. 
Immediate resistance is at 1.0445. Further resistance is at 1.0510 and 1.0547.

INDICATORS

Fast stochastics: Sideways 
MACD: Slightly bearish
Ichimoku: Slightly bearish


OUTLOOK

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