The foreign currencies futures traded as expected overnight, with the European and commodity currencies up and the yen down. The weakest link, the pound, led the decline. The Asia/Pacific stock markets barely moved, but the European bourses, oil and gold sank. The US stock indexes are trading down in pre-open market.
The short-term outlook remains bearish for the European and commodity currencies and bullish for the yen. The medium-term outlook remains bearish for the European currencies and sideways for the yen and the commodity currencies. My model is long all of the foreign currencies futures except for the yen and the pound.
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Overnight:
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Australia: NAB's Business Confidence Index rose 4.0 points to a reading of +19 in February. The Business Conditions Index advanced 5.0 points to +8.
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Japan: The leading index rose to 97.1 in January from 94.7 in December, the coincident index climbed to 99.9 from 97.4 in December, and the lagging index moved up to 85.1 from December's 82.9.
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Japan: Orders for machine tools soared 217.3% year-on-year in February following a 189.4% increase in January.
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Germany: The manufacturing turnover increased 1% in January, compared to the 0.8% fall in the previous month, revised from 2% decline reported initially.
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France: The trade deficit narrowed to EUR 3.68 billion in January from December's revised shortfall of EUR 4.15 billion.
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Switzerland: The CPI increased of 0.1% in February and 0.9% on an annual basis.
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Greece: WSJ: Greek Prime Minister George Papandreou is asking US officials to investigate speculation in euro currency markets he says is driving up Greek borrowing costs.
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UK: The RICS House price balance declined to 17% in from 31% in January.
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UK: The trade deficit increased sharply to GBP 8 billion in January from a deficit of GBP 7 billion in December, revised from the initial estimate of GBP 7.3 billion.
Today’s economic calendar:
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US: No data
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Canada: No data
EUR- March
Luca Model: Long since February 26
The March euro opens lower in the US after closing little changed on Monday. The short-term outlook is slightly bearish. The medium-term outlook is bearish but my model is long.
Immediate support is at 1.3520. The low of the downtrend is 1.3433.
Initial resistance is at 1.3600. The 21-day moving average resists at 1.3673. The next caps are 1.3737 and 1.3800.
INDICATORS
Fast stochastics: Bearish
MACD: Bullish
Ichimoku: Bearish
OUTLOOK
NEAR-TERM: Bearish
MEDIUM-TERM: Bearish
LONG-TERM: Bearish
JPY - March
Luca Model: Short since March 5
The March Japanese advanced further overnight and surpassed the 21-day moving average. The short-term outlook is slightly bullish. The medium-term outlook remains sideways and my model reversed its long signal.
Immediate resistance is at 111.56. Distant resistance is at 112.49.
Initial support is at 111.30 from the 21-day moving average. Further support is at 110.64. The bottom of the Ichimoku cloud follows at 110.02.
INDICATORS
Fast stochastics: Bearish (oversold)
MACD: Bullish
Ichimoku: Bullish
OUTLOOK
NEAR-TERM: Slightly bullish
MEDIUM-TERM: Sideways
LONG-TERM: Bullish
GBP - March
Luca Model: Short since March 9 (reversing long since March 5)
The oversold March pound declined further overnight to reach a one-week low. The short-term outlook is bearish. The medium-term outlook is bearish and my model went short.
Immediate support is at 1.4940. The next support is at 1.4877. Distant support is at 1.4778.
Initial resistance is at 1.4990. The next caps are 1.5041, 1.5095 and 1.5174. The 21-day moving average resists at a very distant 1.5342.
INDICATORS
Fast stochastics: Slightly bearish
MACD: Sideways
Ichimoku: Sideways
OUTLOOK
NEAR-TERM: Bearish
MEDIUM-TERM: Bearish
LONG-TERM: Bearish
CHF - March
Luca Model: Long since February 26
The March Swiss franc fell overnight after closing little changed on Monday. The short-term outlook is slightly bearish. The medium-term outlook remains bearish, but my model is long.
Initial support is at .9250. Further support is at .9208. The low of the downtrend is .9176.
Immediate resistance is at .9332 from the 21-day moving average. This is followed by .9339 and .9393. Above .9442, distant resistance is at .9525.
INDICATORS
Fast stochastics: Slightly bearish
MACD: Sideways
Ichimoku: Bearish
OUTLOOK
NEAR-TERM: Slightly bearish
MEDIUM-TERM: Bearish
LONG-TERM: Bearish
CAD – March
Luca Model: Long since February 26
The March Canadian dollar fell overnight after closing little changed on Monday; Monday’s candlestick pattern shows a doji and that was formed below the peak of the uptrend. The short-term outlook is slightly bearish. The medium-term outlook is sideways and my model is long.
Immediate support is at .9697. Further support is at .9669. The 21-day moving average supports at .9591.
Nearby resistance is at .9730. The top of the uptrend is .9780. Above .9827, distant resistance is seen at .9898.
INDICATORS
Fast stochastics: Sideways
MACD: Bullish
Ichimoku: Slightly bearish
OUTLOOK
NEAR-TERM: Slightly bearish
MEDIUM-TERM: Sideways
LONG-TERM: Bullish
AUD – March
Luca Model: Long since February 26
The March Australian dollar slipped overnight after forming an apparent doji on Monday. The short-term outlook is slightly bearish. The medium-term outlook is sideways and my model is long.
Immediate support is at .9042. The next floor is .8997. The 21-day moving average follows at .8972.
Initial resistance is at .9125. The next cap is .9169. The top of the uptrend is .9275.
INDICATORS
Fast stochastics: Sideways
MACD: Bullish
Ichimoku: Sideways
OUTLOOK
NEAR-TERM: Slightly bearish
MEDIUM-TERM: Sideways
LONG-TERM: Bullish
