The gold/oil ratio is up

The appetite for risk is limited ahead of the US open under the weight of the automatic $85 billion spending cuts in the US and following Beijing's announcement of an increase in down payments and loan rates to stop rising home prices. Most foreign currencies open under pressure after tanking on Friday following. The Australian dollar extended losses due to new local weak data. The overall risk remains on the downside while traders gauge the immediate impact of the sequester. Except for the Nikkei, the Asia/Pacific stock indexes fell. The European bourses are down and the US stock markets are lower in pre-open trading. The gold/oil ratio is up.

The short-term outlook for most foreign currencies is sideways with downside risk. The medium-term outlook for most of the foreign currencies is sideways. The LGR short-term model is short on all foreign currencies.

Good luck!


Overnight

  • China: The non-manufacturing PMI declined to 54.5 in February from 56.2 in January

  • Australia: The TD securities inflation was flat February following +0.3% in January.

  • Australia: The total number of buildings approvals was down 2.4% in January, following the 4.4% contraction in December.

  • Australia: Company gross operating profits fell 1.0% in the fourth quarter following -2.7% in the third quarter.

  • UK: Hometrack housing prices rose 0.1% in February from flat in January.

  • UK: The Markit/CIPS purchasing managers' index fell to 46.8 in February from 48.7 in January.

  • Eurozone: The Sentix investor confidence index fell to -10.6 in March, the weakest since December 2012, from -3.9 in the prior month.

  • Eurozone: The Producer Price Index rose 0.6% in January after contracting 0.2% in December.


Today's economic calendar

  • No data


EUR – March

The LGR Model: Short since February 7

The March euro opens near three-month low in the US after falling in seven of the past eight days. The euro is now trading below the 200-day exponential moving average. It peaked at a 14-month high and bottomed at an over two-year low in July.

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

Initial support is at 1.2967. Further support is at 1.2900.

The 200-day exponential moving average resists at 1.3063. The next caps are 1.3105 and 1.3165. The 21-day exponential moving average resists at a distant 1.3228.

INDICATORS

Fast stochastics: Bearish

MACD: Bearish

Ichimoku: Slightly bearish

OUTLOOK

NEAR-TERM: Sideways to slightly bearish

MEDIUM-TERM: Sideways

LONG-TERM: Sideways


JPY – March

The LGR Model: Short since March 1

The March Japanese yen opens on a soft note after dropping to a four-day low and below the 21-day exponential moving average on Friday. It remains within the ample range of February 25, when the yen reversed from a 2 1/2-year low and closed above the 21-day exponential moving average for the first time since November 13. 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 and the LGR model is short.

Initial support is at 1.0655. A pivot low is at 1.0588.

The 21-day exponential moving average caps at 1.0811. Further resistance is at 1.0970, 1.1009 and 1.1065.

INDICATORS

Fast stochastics: Bearish

MACD: Slightly bullish

Ichimoku: Sideways

OUTLOOK

NEAR-TERM: Sideways

MEDIUM-TERM: Bearish

LONG-TERM: Bearish


GBP – March

The LGR Model: Short since February 11

The March pound opens little changed, while attempting to recover, after falling hard to a 20-month low on Friday on a combination of poor UK data and US issues. It is trading below the bottom of a four-year old symmetrical triangle. The 21-day exponential moving average floats far above and the pound is oversold. The pound peaked at a 17-month high on January 2.

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

Immediate resistance is at 1.5080. The next cap is 1.5185.

A pivot low is at 1.4883. Further support is at 1.4910, 1.4875 and 1.4790.

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 opens slightly higher in the US after sliding for two days and marking a 3 ½-month low on Friday. The franc is trading below the trend line rising since November. It remains well below the 21-day exponential moving average on Wednesday and is oversold. 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 bearish and the LGR model is short.

Initial resistance is at 1.0657. Further resistance is at 1.0708. The 21-day exponential moving average caps at 1.0774.

A pivot low is at 1.0555. Further support is at 1.0480.

INDICATORS

Fast stochastics: Sideways

MACD: Bearish

Ichimoku: Bearish

OUTLOOK

NEAR-TERM: Sideways

MEDIUM-TERM: Slightly bearish

LONG-TERM: Sideways


CAD – March

The LGR Model: Short since February 5

The March Canadian dollar opens little changed in the US after dropping for four weeks and bouncing on Friday from a 7 1/2-month low. 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 again.

Immediate support is at .9665. Further support is at .9535.

Initial resistance is at .9785. The 21-day exponential moving average caps at .9847.

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 has fallen in five of the past six days and opens at a five-month low in the Far East. The Aussie is trading well below the 21-day exponential moving average. The Aussie formed a peak for the uptrend on January 10.

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

The current low is 1.0104. Further support follows at 1.0025.

Immediate resistance is at 1.0168. The next cap is 1.0230. The 21-day exponential moving average resists at 1.0269.

INDICATORS

Fast stochastics: Bearish

MACD: Bearish

Ichimoku: Bearish

OUTLOOK

NEAR-TERM: Bearish

MEDIUM-TERM: Bearish

LONG-TERM: Sideways

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