The foreign currencies futures ended divergently on Wednesday, with the pound and the commodity currencies higher, the euro lower and the Swiss franc and yen flat. The euro was hurt by the lack of details provided by the EU’s finance ministers with regard to their plan for extending a lifeline to Greece if its fiscal situation deteriorated further. The US stock markets and oil surged, but gold closed lower.
The short-term outlook is bullish for about half a day and then bearish for the European and commodity currencies and sideways to slightly bearish for the yen. The medium-term outlook is sideways for the European currencies and the yen and bullish for the commodity currencies. My model is long all of the foreign currencies futures except for the yen.
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Analysis based on:
“Trading in the Global Currency Markets” - Prentice Hall Press, 3rd edition 2007
“Technical Analysis Applications” - McGraw-Hill, 2004
Overnight:
• US: The PPI fell by 0.6% in February following an unrevised 1.4% increase in January. The core PPI edged up by 0.1% in February after rising by 0.3% in January.
• Canada: Wholesale sales in current dollars rose 3.0% in January to $44.4 billion, the strongest increase in three years.
Today’s economic calendar:
• Australia: No data
• Japan Leading index/coincident index for January
EUR- March
Luca Model: Long since February 26
The June euro reversed from a new high for the upmove to close down on Wednesday. The short-term outlook is bullish for about half a day. The medium-term outlook is sideways and my model is long.
Immediate resistance is at 1.3800. The next caps are 1.3862 and 1.3900.
The 21-day moving average supports at 1.3691. This is followed by 1.3600.
INDICATORS
Fast stochastics: Sideways
MACD: Bullish
Ichimoku: Bearish
OUTLOOK
NEAR-TERM: Bullish for about half a day
MEDIUM-TERM: Sideways
LONG-TERM: Bearish
JPY - March
Luca Model: Short since March 5
The June Japanese yen traded in an inside range and closed flat on Wednesday. The resistance of its 21-day moving average and the pressure from the European and commodity currencies should keep the yen on the soft side. The short-term outlook is sideways to slightly bearish. The medium-term outlook remains sideways and my model is short.
Initial support is at 110.18. Below 109.84, distant support lies at 109.24.
The 21-day moving average caps at 111.04. Above 111.56, distant resistance is at 112.49.
INDICATORS
Fast stochastics: Slightly bearish
MACD: Bearish
Ichimoku: Sideways
OUTLOOK
NEAR-TERM: Sideways to slightly bearish
MEDIUM-TERM: Sideways
LONG-TERM: Bullish
GBP - March
Luca Model: Long since March 11
The June pound rallied a near three-week high and closed above the 21-day moving average on Wednesday. The short-term outlook is bullish for about half a day. The medium-term outlook is sideways and my model is long.
Initial resistance is 1.5377. The next caps are 1.5412 and 1.5556.
Immediate support is at 1.5294. The 21-day moving average is at 1.5251. The next support is 1.5165.
INDICATORS
Fast stochastics: Bullish (overbought)
MACD: Bullish
Ichimoku: Sideways
OUTLOOK
NEAR-TERM: Bullish for about half a day
MEDIUM-TERM: Sideways
LONG-TERM: Bearish
CHF - March
Luca Model: Long since February 26
The June Swiss franc rallied on Wednesday to the highest level since the end of January and penetrated the resistance of the Ichimoku cloud. But it was capped by the 10-day moving average and closed little changed. The short-term outlook is bullish for about half a day. The medium-term outlook is sideways and my model is long.
Immediate resistance is at .9521 from the 100-day moving average. Further resistance is at .9557 and .9603.
Initial support is at .9462 from the 55-day moving average. The 21-day moving average follows at .9381.
INDICATORS
Fast stochastics: Sideways
MACD: Bullish
Ichimoku: Bearish
OUTLOOK
NEAR-TERM: Bullish
MEDIUM-TERM: Sideways
LONG-TERM: Bearish
CAD – March
Luca Model: Long since February 26
The overbought June Canadian dollar surged to a new high for the uptrend during its 14-day rally. The short-term outlook is bullish for about half a day. The medium-term outlook is bullish and my model is long.
Above .9930, further resistance is seen at .9970.
Immediate support is at .9872. Below .9828, further support is at .9776, .9730 and .9693 from the 21-day moving average.
INDICATORS
Fast stochastics: Sideways (overbought)
MACD: Bullish (overbought)
Ichimoku: Slightly bearish
OUTLOOK
NEAR-TERM: Bullish for about half a day
MEDIUM-TERM: Bullish
LONG-TERM: Bullish
AUD – March
Luca Model: Long since February 26
The June Australian dollar marked a new high for the uptrend on Wednesday. The short-term outlook is bullish for about half a day. The medium-term outlook is bullish and my model is long.
The new high of the uptrend is .9164. Strong resistance follows at .9218. The top of the uptrend is .9275.
Initial support is .9104. Below .9034, the 21-day moving average follows at .8973. Further support is at .8885.
INDICATORS
Fast stochastics: Sideways (overbought)
MACD: Bullish
Ichimoku: Sideways
OUTLOOK
NEAR-TERM: Bullish
MEDIUM-TERM: Bullish
LONG-TERM: Bullish
