The European and commodity currencies are struggling to extend their timid reaction from Wednesday, but Asia is not typically the place for a big move. The appetite for risk has improved since the US on Wednesday after the Federal Reserve reiterated its support for an ultra-easy monetary policy and following a successful bond auction in Italy. While the US stock markets managed to reverse Monday’s losses, on Friday automatic $85 billion spending cuts could be enforced; this would hurt the markets. Meanwhile, the Asia/Pacific stock indexes are advancing.

The short-term outlook for most European and commodity currencies is sideways. The medium-term outlook for most of the foreign currencies is sideways. The LGR short-term model is short on all the European and commodity currencies.

Good luck!


Overnight

  • Japan: Industrial production fell 1.0% in January following the 2.4% gain in December.

  • Australia: The HIA new home sales rose 4.2% in January, less than 6.2% in December.

  • UK: The Gfk consumer confidence was unchanged at -26 in February.

  • Australia: Private capital expenditure fell 1.2% in the fourth quarter.


Today's economic calendar

  • Eurozone: Consumer Price Index for January

  • Germany: Unemployment rate for February

  • Germany: Consumer Price Index for February

  • France: Producer prices for January

  • France: Consumer spending for January

  • Switzerland: Gross Domestic Product for the fourth quarter


EUR – March

The LGR Model: Short since February 7

The March euro is advancing to a three-day high and is toying with the 100-day exponential moving average. It had fallen to a seven-week low on Tuesday. The euro is trading well below the 55-day and 21-day exponential moving averages. It peaked at a 14-month high and bottomed at an over two-year low in July.

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

Immediate resistance is at 1.3195. Further resistance is at 1.3280.

Initial support is at 1.3070. Further support is at 1.3000 and 1.2900.

INDICATORS

Fast stochastics: Bullish

MACD: Bearish

Ichimoku: Slightly bearish

OUTLOOK

NEAR-TERM: Sideways

MEDIUM-TERM: Sideways

LONG-TERM: Slightly bullish


JPY – March

The LGR Model: Long since February 8

The March Japanese yen is consolidating further around the 21-day exponential moving average after surging on Monday due to adversity to risk. On Monday the yen closed above the 21-day exponential moving average for the first time since November 13. It has been alternating up and down days for 16 days and on Monday it reversed from a 2 1/2-year low. The yen had reached the target of a long-term head–and-shoulders pattern in the 1.0610 area. It had peaked on September 13.

The short-term outlook is sideways. The medium-term outlook is bearish but the LGR model is long.

Immediate resistance is at 1.0970. Further resistance is at 1.1009 and 1.1065.

Initial support is at 1.0780. Further support is at 1.0720 and 1.0655. A pivot low is at 1.0588.

INDICATORS

Fast stochastics: Bullish

MACD: Slightly bullish

Ichimoku: Slightly bullish

OUTLOOK

NEAR-TERM: Sideways

MEDIUM-TERM: Bearish

LONG-TERM: Bearish


GBP – March

The LGR Model: Short since February 11

The March pound is quiet after bouncing on Wednesday from a 16-month low. It is trading below the bottom of a four-year old symmetrical triangle. The 21-day exponential moving average continues to cap far away and the pound 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 bearish and the LGR model is short.

Immediate resistance is at 1.5220. The next caps are 1.5320 and 1.5390.

Initial support is at 1.5079. Further support is at 1.5015 and 1.4910.

INDICATORS

Fast stochastics: Bearish

MACD: Bearish

Ichimoku: Bearish

OUTLOOK

NEAR-TERM: Sideways

MEDIUM-TERM: Bearish

LONG-TERM: Sideways


CHF – March

The LGR Model: Short since February 7

The March Swiss franc is trading near a three-day high, but still within Monday’s large range. The franc is testing again the trend line rising since November. It remains well below the 21-day exponential moving average on Wednesday and is oversold. The franc is trading in a channel rising since November. It peaked at a 10-month high on February 1 and marked a 19-month low on July 24.

The short-term outlook is sideways. The medium-term outlook is slightly bullish but the LGR model is short.

The 200-day exponential moving average caps at 1.0781 and the 21-day exponential moving average resists at 1.0818.

Initial support is at 1.0700. A pivot low is at 1.0657.

INDICATORS

Fast stochastics: Slightly bullish

MACD: Bearish

Ichimoku: Bearish

OUTLOOK

NEAR-TERM: Sideways

MEDIUM-TERM: Slightly bullish

LONG-TERM: Sideways


CAD – March

The LGR Model: Short since February 8

The March Canadian dollar is trading at a three-day high after hitting a 7 1/2-month low on Tuesday. It looks like a possible bullish reversal. The loonie had reached the target of a short-term bearish flag. The loonie is trading well below the 21-day exponential moving average and is oversold. It is testing the bottom of a long-term (19-month) symmetrical triangle and the bottom of a channel declining since September. The loonie is also trading below the 50% mark of the June-September uptrend. The Canadian dollar peaked at a 10-month high on February 1.

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

Initial resistance is at .9805. The 21-day exponential moving average caps at .9892.

Immediate support is at .9700. Further support is at .9632.

INDICATORS

Fast stochastics: Slightly bullish

MACD: Bearish

Ichimoku: Bearish

OUTLOOK

NEAR-TERM: Sideways

MEDIUM-TERM: Bearish

LONG-TERM: Sideways


AUD – March

The LGR Model: Short since February 4

The March Australian dollar rallied after bottoming at a five-month low on Wednesday. The Aussie pierced briefly the base at 1.0200. It is trading well below the 21-day exponential moving average. The Aussie marked a new high for the uptrend on January 10.

The short-term outlook is sideways to slightly bullish. The medium-term outlook is sideways and the LGR model is short.

The 21-day exponential moving average resists at 1.0300. Further resistance is at 1.0350.

Initial support is at 1.0225. A pivot low is at 1.0134. Further support follows at 1.0100 and 1.0025.

INDICATORS

Fast stochastics: Bullish

MACD: Bearish

Ichimoku: Bearish

OUTLOOK

NEAR-TERM: Sideways to slightly bullish

MEDIUM-TERM: Sideways

LONG-TERM: Sideways