Most foreign currencies consolidated in the Far East after another divergent performance on Tuesday. Only the Aussie deepened losses, as weak local data compounded negativity created by the dovish RBA report a day earlier. The euro and franc are struggling up, and the yen extended losses to a new 2 ½-year low. The appetite for risk is recovering selectively in the short run, but remains low in the medium term. Most Asian stock indexes advanced in line with the US stocks.

The short-term outlook for most of the foreign currencies is sideways with various biases. The medium-term outlook for most of the foreign currencies is sideways. The LGR short-term model is long on the euro, franc and Canadian dollar, and short yen, pound and Australian dollar.

Good luck!


Overnight

  • UK: The BRC Shop Price Index declined to 0.6% in January, less than +1.5% in December.

  • Australia: Retail sales fell 0.2% in December, the same as in November.


Today's economic calendar

  • Germany: Factory orders for December


EUR – March

The LGR Model: Long since January 24

The March euro is consolidating after reversing from a one-week low on Tuesday. It marked a new 14-month high on Friday. 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 area. 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 1.3660. A pivot high is at 1.3715.

Good support is at 1.3460. The 21-day exponential moving average follows at 1.3429.

INDICATORS

Fast stochastics: Sideways

MACD: Sideways

Ichimoku: Bullish

OUTLOOK

NEAR-TERM: Sideways

MEDIUM-TERM: Bullish

LONG-TERM: Slightly bullish


JPY – March

The LGR Model: Short since January 24

The oversold March Japanese yen is falling further to a new 2 1/2-year low. The yen is trading below the neckline of a long-term head–and-shoulders pattern and the target is the 1.0580 area. It is trading well below the 21-day exponential moving average. The yen had peaked on September 13.

The short-term outlook is slightly bearish. The medium-term outlook is bearish and the LGR model is short.

Initial support is at 1.0630. Further support is at 1.0580 and 1.0520.

Immediate resistance is at 1.0735. Further resistance is at 1.0850.

INDICATORS

Fast stochastics: Bearish

MACD: Bearish

Ichimoku: Bearish

OUTLOOK

NEAR-TERM: Slightly bearish

MEDIUM-TERM: Bearish

LONG-TERM: Bearish


GBP – March

The LGR Model: Short since February 1

The March pound is seeking a floor after sinking to a 6 ½-month low on Tuesday. The pound is approaching the bottom of a long-term (four-year) triangle in the 1.56 area. There is also a double top formation targeting the 1.54 area. It is trading below the 21-day exponential moving average but is not oversold any more. 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 short.

Immediate support is at 1.5625. Further support is at 1.5505.

Initial resistance is at 1.5720. Further resistance is at 1.5805 and 1.5875.

INDICATORS

Fast stochastics: Bearish

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 is edging up toward Friday’s 10-month high. 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 1.1090. Further resistance is at 1.1200.

Initial support is at 1.0925. Further support is at 1.0875 and 1.0820.

INDICATORS

Fast stochastics: Slightly bullish

MACD: Slightly bullish

Ichimoku: Slightly bullish

OUTLOOK

NEAR-TERM: Sideways

MEDIUM-TERM: Slightly bullish

LONG-TERM: Sideways


CAD – March

The LGR Model: Long since January 31

The March Canadian dollar is consolidating around the 21-day exponential moving average. The loonie had reached a six-month low on January 25. 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 long.

Immediate resistance is at 1.0055. Significant resistance is at 1.0175.

Initial support is at .9955. Further support is at .9825.

INDICATORS

Fast stochastics: Bullish

MACD: Sideways

Ichimoku: Sideways

OUTLOOK

NEAR-TERM: Sideways

MEDIUM-TERM: Sideways

LONG-TERM: Sideways


AUD – March

The LGR Model: Short since February 4

The March Australian dollar fell to a five-week low in Asia after having an outside day and closing a little lower fell on Tuesday. The Aussie marked a new high for the uptrend on January 10.

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

Initial support is at 1.0280. Further support follows at 1.0215.

The 21-day exponential moving average resists at 1.0412. Further resistance is at 1.0510 and 1.0547.

INDICATORS

Fast stochastics: Bearish

MACD: Bearish

Ichimoku: Slightly bearish

OUTLOOK

NEAR-TERM: Sideways to slightly bearish

MEDIUM-TERM: Sideways

LONG-TERM: Sideways