Most of the foreign currency futures traded as expected in Europe following the aggressive market on Friday, when the European and commodity currencies sank: all of the European and commodity currencies but the pound bounced, while the yen declined. The short-term outlook is slightly bullish for the European and commodity currencies and bearish for the yen.
Except for Hang Seng, which tanked, the Asia/Pacific stock markets closed mixed, the European bourses are mixed, while gold and oil rallied.
My model is short all of the majors foreign currencies but yen.
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Overnight:
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Australia: No data
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Japan: The current account showed surplus of 900.8 billion yen in December, following the 1.103 trillion yen surplus in November. The trade balance showed a surplus of 631.2 billion yen after the 490.6 billion yen surplus in the previous month.
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Eurozone: The index for Sentix investor sentiment plunged to -8.2 in February from January's - 3.7. The expectations index of the survey dropped to 3.75 for February from January's 11.25 and the current situation index fell to -19.5 from -17.5.
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France: The industrial sentiment climbed to 104 in January, the highest since March 2008, from December's upwardly revised reading of 102.
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Germany: The manufacturing sector turnover dropped by a real 6% annually in December, following a revised 9.6% fall in November.
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Switzerland: The unadjusted jobless rate rose to 4.5% in January from 4.4% in December.
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Switzerland: Retail sales rose a seasonally adjusted 3.1% in December and 4.7% year-on-year, the best since June 2008.
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UK: No data
Today’s economic calendar:
- US: No data
- Canada: Housing starts for January
FX FUTURES
Euro FX Futures
Luca Model: Short position since January 20
Since June 15 the euro has had a very clean downmove, with only two recovery periods that lasted two days and 2 ½ days after declines between three and four days. The oversold March euro bounced overnight after collapsing to a fresh nine-month low on Friday, completing a series of three down days. The short-term outlook is slightly bullish. The medium-term outlook remains bearish and my model is short.
Immediate resistance is at 1.3722. Above 1.3783, the next levels follow at 1.3855 and 1.3906. The 21-day moving average resists at a very distant 1.4037.
Monday’s low is 1.3621. The low of the downtrend is 1.3584. Further support is at 1.3483.
INDICATORS
Fast stochastics: Sideways
MACD: Bearish
Ichimoku: Slightly bearish
OUTLOOK
NEAR-TERM: Slightly bullish
MEDIUM-TERM: Bearish
LONG-TERM: Bearish
Japanese Yen
Luca Model: Long since February 4 (reversing short since February 1)
The March Japanese yen edged lower overnight after closing little changed on Friday. The short-term outlook is bearish. The medium-term outlook remains sideways and my model went long.
Initial support is at 111.54. Below 111.05, the 21-day moving average supports at 110.74. Distant support is at 109.57.
Good resistance is at 112.50. The top of the upmove is 112.95 and the top of the Ichimoku cloud is at 113.18.
INDICATORS
Fast stochastics: Sideways
MACD: Bullish
Ichimoku: Slightly bullish
OUTLOOK
NEAR-TERM: Slightly bearish
MEDIUM-TERM: Sideways
LONG-TERM: Bullish
British Pound
Luca Model: Short since January 21
The March pound marked time overnight after collapsing to a near nine-month low on Friday. The short-term outlook is slightly bearish early and then bullish for the oversold currency. The medium-term outlook is bearish and my model remains short.
The current low of the downtrend is 1.5541. Further support is at 1.5469. Distant support is at 1.5388.
Initial resistance is at 1.5612. The next resistance is at 1.5675. Above 1.5769, the next caps are 1.5825 and 1.5873. The 21-day moving average follows at a very distant 1.5985.
INDICATORS
Fast stochastics: Bearish (oversold)
MACD: Bearish
Ichimoku: Sideways
OUTLOOK
NEAR-TERM: Bearish early, then slightly bullish
MEDIUM-TERM: Sideways
LONG-TERM: Slightly bullish?
Swiss Franc
Luca Model: Long since February 3 (reversing short since January 20)
The oversold March Swiss franc edged higher today after falling to a near six-month low on Friday. The short-term outlook is slightly bullish. The medium-term outlook is bearish and my model is short.
Immediate resistance is at .9369. The next cap is .9479. The 21-day moving average resists at a distant .9529.
The current low of the downtrend is .9264. Distant support is at .9187.
INDICATORS
Fast stochastics: Sideways
MACD: Bearish
Ichimoku: Bearish
OUTLOOK
NEAR-TERM: Slightly bullish
MEDIUM-TERM: Bearish
LONG-TERM: Slightly bullish
Canadian Dollar
Luca Model: Long since February 2 (Reversing short since January 20)
The oversold March Canadian dollar corrected higher overnight after falling to a three-month low on Friday. The short-term outlook is slightly bullish. The medium-term outlook is sideways (barely) and my model is short.
Immediate resistance is at .9408 from the 100-day moving average. The 21-day moving average resists at .9452.
The current low is .9319. The low for the downtrend is .9274. The next support is at .9217 from a pivot low. Further support is at .9175.
INDICATORS
Fast stochastics: Slightly bullish
MACD: Bearish
Ichimoku: Bullish
OUTLOOK
NEAR-TERM: Slightly bullish
MEDIUM-TERM: Sideways?
LONG-TERM: Bullish
Australian Dollar
Luca Model: Short since January 20
The March Australian dollar bounced overnight from a four-month low on Friday. The short-term outlook is slightly bullish. The medium-term outlook is still sideways, but only because the Aussie remains on the verge of medium-term double top. My model is short.
Initial resistance is at .8678. The next level is .8744. The 100-day moving average follows at .8810 and the 21-say moving average resists at a very distant .8875.
The neckline supports at .8587, just above the low of the downtrend at .8573. A further support follows at .8448. Distant support comes at .8346.
INDICATORS
Fast stochastics: Slightly bearish
MACD: Bearish
Ichimoku: Sideways
OUTLOOK
NEAR-TERM: Slightly bullish
MEDIUM-TERM: Sideways?
LONG-TERM: Bullish
