The euro led all the foreign currencies futures down on Thursday, as the Greek drama continued.
German PM Merkel’s chief finance spokesman suggested that Greece should utilize the IMF, rather the Eurozone because of its greater technical ability to provide aid to countries. The US stock markets closed mostly higher, oil down and gold slightly up. The US economic data, which featured the CPI and leading indicators reports, and the Philly Fed survey, were not surprising.
The short-term outlook is slightly bearish for the European and commodity currencies and sideways bullish 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 euro and 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 current account deficit increased to $115.6 billion or 3.2% of GDP in the fourth quarter of 2009 from $102.3 billion in the third quarter, or 2.9% of GDP. For the full year 2009, the current account deficit decreased to $419.9 billion or 2.9% of GDP from $706.1 billion or 4.9% of GDP in 2008.
• US: First-time claims for unemployment benefits edged down to 457,000 from the previous week's unrevised figure of 462,000.
• US: The CPI was unchanged in February after increasing by 0.2% in each of the five previous months. The core CPI rose by 0.1% in February following a 0.1% decrease in January.
• US: The leading indicators index edged up 0.1% in February following a 0.3% increase in January.
• US: The Philly Fed’s index of activity in the manufacturing sector rose to 18.9 in March from 17.6 in February.
• Canada: Canadian government is shifting its rhetoric on the Canadian dollar and playing down concerns about the currency’s gains in a bid to brace companies and consumers for parity with the US dollar.
• Canada: Foreign investment in Canadian securities increased to $11.8 billion in January.
Today’s economic calendar:
• Australia: No data
• Japan: No data
EUR- March
Luca Model: Short since March 18 (reversing long since February 26)
The June euro collapsed on Thursday after reversing from a new high for the upmove the day before. It broke the bottom of its rising channel and closed below the 21-day moving average. The short-term outlook slightly bearish but the oversold condition should minimize further weakness today. The medium-term outlook is sideways and my model reversed its long position.
Initial support is at 1.3580. This is followed by 1.3515. Distant support lies at 1.3433 from a pivot low.
The 21-day moving average resists at 1.3685. Further resistance is at 1.3740. The next cap is 1.3800.
INDICATORS
Fast stochastics: Bearish (oversold)
MACD: Bullish (overbought)
Ichimoku: Bearish
OUTLOOK
NEAR-TERM: Slightly bearish
MEDIUM-TERM: Sideways
LONG-TERM: Bearish
JPY - March
Luca Model: Short since March 5
The June Japanese yen had an outside day and closed slightly down on Thursday. It is trading just below the 21-day moving average. The short-term outlook is sideways. The medium-term outlook remains sideways and my model is short.
Initial support is at 110.34. Below 109.84, distant support lies at 109.24.
The 21-day moving average caps at 111.03. Above 111.56, distant resistance is at 112.49.
INDICATORS
Fast stochastics: Slightly bullish
MACD: Bearish
Ichimoku: Sideways
OUTLOOK
NEAR-TERM: Sideways
MEDIUM-TERM: Sideways
LONG-TERM: Bullish
GBP - March
Luca Model: Long since March 11
The June pound closed down on Thursday in an inside range and is testing the support of the 21-day moving average at 1.5251. The short-term outlook is slightly bearish. The medium-term outlook is sideways and my model is long.
Immediate support is at 1.5200. The next support is 1.5165.
Initial resistance is 1.5286. The next caps are 1.5323, 1.5412 and 1.5556.
INDICATORS
Fast stochastics: Bullish
MACD: Bullish
Ichimoku: Sideways
OUTLOOK
NEAR-TERM: Slightly bearish
MEDIUM-TERM: Sideways
LONG-TERM: Bearish
CHF - March
Luca Model: Long since February 26
The June Swiss franc fell but found support from the 21-day moving average and closed with only small losses. The short-term outlook is slightly bearish. The medium-term outlook is sideways and my model is long.
Initial support is at .9390 from the 21-day moving average. The next support follows at .9338 from the bottom of its rising channel.
The 100-day moving average resists at .9521. Further resistance is at .9557 and .9603.
INDICATORS
Fast stochastics: Slightly bearish
MACD: Bullish
Ichimoku: Bearish
OUTLOOK
NEAR-TERM: Slightly bearish
MEDIUM-TERM: Sideways
LONG-TERM: Bearish
CAD – March
Luca Model: Long since February 26
The overbought June Canadian dollar fell in an inside range on Thursday after surging to a new high for the uptrend on Wednesday. The short-term outlook is slightly bearish for about half a day, since the loonie has not yet fallen for two consecutive days during its steep rally since February 26. The medium-term outlook is bullish and my model is long. Be careful, the loonie is in a steep rising wedge!
Below .9828, further support is at .9776 and .9710 from the 21-day moving average.
Above the high of the uptrend at .9930, further resistance is seen at .9970.
INDICATORS
Fast stochastics: Slightly bearish
MACD: Bullish (overbought)
Ichimoku: Slightly bearish
OUTLOOK
NEAR-TERM: Slightly bearish for about half a day
MEDIUM-TERM: Bullish
LONG-TERM: Bullish
AUD – March
Luca Model: Long since February 26
The June Australian dollar fell in an inside range after marking a new high for the uptrend on Wednesday, but found support from a Gann fan line. The short-term outlook is slightly bearish for about half a day. The medium-term outlook is bullish and my model is long.
Initial support is at .9104. Below .9030, the 21-day moving average follows at .8986. Distant support is at .8885.
The new high of the uptrend is .9164. Strong resistance follows at .9218. Distant resistance is stacked at .9275.
INDICATORS
Fast stochastics: Sideways (overbought)
MACD: Bullish
Ichimoku: Sideways
OUTLOOK
NEAR-TERM: Slightly bearish for about half a day
MEDIUM-TERM: Bullish
LONG-TERM: Bullish
