The LGR short-term model is short on most foreign currencies

The appetite for risk is neutral in the FX space at the start of the US session ahead of the non-farm payrolls report. The consensus for the NFP is 196K. The large drop in the Chinese trade surplus went unnoticed, probably because it’s only temporary. The European currencies retain strength and the commodity currencies weakness. On Thursday, the Canadian dollar collapsed further to a near four-year low on weak local data. The Asian stock markets were mixed. The European bourses are up and the US stock markets are higher in pre-open trading. Gold, oil and silver are up as well.

The short-term outlook for the foreign currencies is sideways through the release of the NFP report; then the risk is on the downside. The medium-term outlook for most foreign currencies is sideways. The LGR short-term model is short on most foreign currencies.

Good luck!

Overnight

• UK: The British Retail Consortium reported that same-store sales rose 0.4% annually in December.

• China: The trade surplus fell sharply to $25.64 billion in December from the $33.80 billion in November.

• Eurozone: Gross Domestic Product came in at +0.1% in Q3 following +0.3% in Q2.

• France: Industrial output advanced 1.3% in November, following -0.5% in October.

• Switzerland: Unemployment rate was stable at 3.2% in December.

• Switzerland: Consumer Price Index gained 0.1% year-on-year in December, the same as in November.

• UK: Industrial production remained unchanged in November following +0.3% in October.

Today's economic calendar

• US: Nonfarm payrolls/unemployment rate for December

• Canada: Unemployment rate for December

EUR – March

The LGR Model: Short since January 2

The March euro starts little changed in the US after reversing from a five-week low on Thursday. It tested again the trend line rising since July 9. Euro peaked at an over two-year high in thin volume on December 27. It trades below the 21-day exponential moving average. Euro peaked at an over two-year high on December 18. Essentially it reached the target of a bullish flag before collapsing. It reached a near two-month low on November 7. Euro formed a long-term bottom in July 2012.

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

Immediate resistance is at 1.3635. The 21-day exponential moving average caps at 1. 3653. Distant resistance is at 1.3750.

Initial support is at 1.3547. Further support is at 1.3525 and 1.3470. .

INDICATORS

Fast stochastics: Sideways

MACD: Slightly bearish

Ichimoku: Sideways

OUTLOOK

NEAR-TERM: Sideways

MEDIUM-TERM: Bullish

LONG-TERM: Sideways

JPY – March

The LGR Model: Short since October 29

The March Japanese yen opens under pressure after falling to a one-week low on Wednesday. It marked an over five-year low last week. The yen has been falling since November 8, when it broke the bottom of a symmetrical triangle. It remains below the 21-day exponential moving average. The yen formed a long-term peak on June 13, 2012.

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

Initial support is at .9515. The current low of the downtrend is .9486. Further support is at .9395.

The 21-day exponential moving average caps at .9614. Further resistance is at .9680 and .9793.

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 8

The March pound opens lower on profit taking in the US after marching up to a one-week high on Thursday. It trades above the 21-day exponential moving average. The pound ended 2013 at a 2 ½-year high. It formed a short-term bottom at a three-week low on December 17. The pound had formed a medium-term bottom on November 12 and a long-term bottom at a three-year low on July 9.

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

The 21-day exponential moving average supports at 1.6390. The next supports are 1.6329, 1.6295 and 1.6215.

Immediate resistance is at 1.6490. The current peak is 1.6572.

INDICATORS

Fast stochastics: Bearish

MACD: Sideways

Ichimoku: Bullish

OUTLOOK

NEAR-TERM: Sideways to slightly bearish

MEDIUM-TERM: Bullish

LONG-TERM: Slightly bullish

CHF – March

The LGR Model: Short since January 2

The March Swiss franc starts little changed in the US after advancing to at a two-day high on Thursday and extending losses to a 1 ½-month low on Wednesday. The rally formed a potential piercing line reversal. It had peaked at an over two-year high on December 27. The franc seems to have formed a double top pattern. It is trading below the 21-day exponential moving average. The franc bottomed at a 1 ½-month low on November 7. The franc formed a medium-term bottom on July 10 and a long-term bottom on May 22.

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

Immediate resistance is at 1.1085. The 21-day exponential moving average caps at 1.1111.

Initial support is at 1.0960. Further support is at 1.0935 and 1.0885.

INDICATORS

Fast stochastics: Sideways

MACD: Bearish

Ichimoku: Slightly bearish

OUTLOOK

NEAR-TERM: Sideways

MEDIUM-TERM: Sideways

LONG-TERM: Slightly bullish

CAD – March

The LGR Model: Short since November 18

The March Canadian dollar opens under pressure after extending losses to a new 3 2/3-year low and Friday should see more weakness. It is trading well below the 21-day exponential moving average and is oversold. It had been free falling since November 19. The loonie peaked at a one-month high on October 22. A medium-term peak was formed on July 31.

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

Immediate support is at .9145. The next support is .9090 and .9035. Initial resistance is at .9260. The 21-day exponential moving average caps at a distant .9337.

INDICATORS

Fast stochastics: Bearish

MACD: Bearish

Ichimoku: Bearish

OUTLOOK

NEAR-TERM: Sideways

MEDIUM-TERM: Bearish

LONG-TERM: Bearish

AUD – March

The LGR Model: Short since November 20

The March Australian dollar starts little changed in the US after falling to a one-week low on Thursday and marking a 3 1/2-week high late last week. It trades below the declining 21-day exponential moving average. The Aussie bottomed at a 4 1/2-month low on December 18. It essentially reached the target of a head-and-shoulder formation before reversing. The Aussie formed a medium-term high on April 11 and a long-term top on January 10. It bottomed at a three-year low on August 5.

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

The 21-day exponential moving average caps at .8909. Further resistance is at .8965 and .9065.

Initial support is at .8800. A long-term bottom is at .8765.

INDICATORS

Fast stochastics: Slightly bearish

MACD: Slightly bullish

Ichimoku: Slightly bullish

OUTLOOK

NEAR-TERM: Sideways to slightly bearish

MEDIUM-TERM: Bearish

LONG-TERM: Sideways