Most foreign currencies consolidated in the Far East, where most major foreign currencies incurred some degree of pressure after tanking on Friday following the automatic $85 billion spending cuts. Only the Australian dollar extended losses due to fresh 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 short-term outlook for most foreign currencies is sideways. The medium-term outlook for most of the foreign currencies is sideways. The LGR short-term model is short on all foreign currencies, but the Canadian dollar.
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.
Today's economic calendar
UK: PMI construction for February
Eurozone: Sentix investor confidence for March
Eurozone: Producer Price Index for January
EUR – March
The LGR Model: Short since February 7
The March euro consolidated a near three-month low in the Far East 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. 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 1.3229.
INDICATORS
Fast stochastics: Bearish
MACD: Bearish
Ichimoku: Slightly bearish
OUTLOOK
NEAR-TERM: Sideways
MEDIUM-TERM: Sideways
LONG-TERM: Sideways
JPY – March
The LGR Model: Short since March 1
The March Japanese yen remains soft 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 1.0813. 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 is little changed 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.
A pivot low is at 1.4883. Further support is at 1.4910, 1.4875 and 1.4790.
Immediate resistance is at 1.5080. The next cap is 1.5185.
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 little changed 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.
A pivot low is at 1.0555. Further support is at 1.0480.
Initial resistance is at 1.0657. Further resistance is at 1.0708. The 21-day exponential moving average caps at 1.0774.
INDICATORS
Fast stochastics: Bearish
MACD: Bearish
Ichimoku: Bearish
OUTLOOK
NEAR-TERM: Sideways
MEDIUM-TERM: Slightly bearish
LONG-TERM: Sideways
CAD – March
The LGR Model: Long since March 1
The March Canadian dollar is quiet 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 but the LGR model is long.
Initial resistance is at .9785. The 21-day exponential moving average caps at .9847.
Immediate support is at .9665. Further support is at .9535.
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 dropped to 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.
A pivot low is at 1.0134. Further support follows at 1.0100 and 1.0025.
Immediate resistance is at 1.0230. The 21-day exponential moving average resists at 1.0272.
INDICATORS
Fast stochastics: Bearish
MACD: Bearish
Ichimoku: Bearish
OUTLOOK
NEAR-TERM: Bearish
MEDIUM-TERM: Bearish
LONG-TERM: Sideways
CME Group is a trademark of CME Group Inc. The Globe logo and CME are trademarks of Chicago Mercantile Exchange Inc. CBOT and Chicago Board of Trade are trademarks of the Board of Trade of the City of Chicago. NYMEX is a trademark of New York Mercantile Exchange, Inc. All other trademarks are the property of their respective owners. Further information about CME Group can be found at www.cmegroup.com.
Copyright © 2009 CME Group. All rights reserved.
Recommended Content
Editors’ Picks
EUR/USD fluctuates in daily range above 1.0600
EUR/USD struggles to gather directional momentum and continues to fluctuate above 1.0600 on Tuesday. The modest improvement seen in risk mood limits the US Dollar's gains as investors await Fed Chairman Jerome Powell's speech.
GBP/USD stabilizes near 1.2450 ahead of Powell speech
GBP/USD holds steady at around 1.2450 after recovering from the multi-month low it touched near 1.2400 in the European morning. The USD struggles to gather strength after disappointing housing data. Market focus shifts to Fed Chairman Powell's appearance.
Gold retreats to $2,370 as US yields push higher
Gold stages a correction on Tuesday and fluctuates in negative territory near $2,370 following Monday's upsurge. The benchmark 10-year US Treasury bond yield continues to push higher above 4.6% and makes it difficult for XAU/USD to gain traction.
XRP struggles below $0.50 resistance as SEC vs. Ripple lawsuit likely to enter final pretrial conference
XRP is struggling with resistance at $0.50 as Ripple and the US Securities and Exchange Commission (SEC) are gearing up for the final pretrial conference on Tuesday at a New York court.
US outperformance continues
The economic divergence between the US and the rest of the world has become increasingly pronounced. The latest US inflation prints highlight that underlying inflation pressures seemingly remain stickier than in most other parts of the world.