The foreign currencies futures open little changed in the US ahead of the release of non-farm payrolls report. The report should be bad. In addition, the market will be quite thin ahead of the long weekend. The Asia/Pacific stock markets closed up, the European bourses are up, but the gold/spread is up as well, which shows the lack of conviction.
The short-term outlook is sideways for all of the foreign currencies futures through the release of the US NMF report. After that, you will have to take your cues from the data (how it compares to expectations for a poor reading) and trade on the second leg of the market reaction with help from advanced Fibonacci analysis. The medium-term outlook is sideways for most of the European and commodity currencies, amid general risk adversity. My model is now long on the Dow Jones CME FX$INDEX and all of the foreign currency futures except for the pound and the Canadian dollar.
This analysis is based on my books, as follows:
“Trading in the Global Currency Markets” - Prentice Hall Press, 3rd edition 2007
“Technical Analysis Applications” - McGraw-Hill, 2004
Overnight:
-
Australia: The Performance of Services Index compiled by AIG/Commonwealth rose by 0.9 points in August to 47.5.
-
Japan: Capital spending fell 1.7% on year in the second quarter following the 11.5% fall in the previous quarter.
-
Eurozone: Retail sales rose 1.1% in July compared to the same month a year ago following a 1.2% increase in June.
-
Eurozone: Services purchasing managers' index rose to 55.9 in August from 55.8 in July, and higher than the preliminary reading of 55.6. The composite PMI fell to 56.2 in August from 56.7 in July, but rose from the preliminary estimate of 56.1.
-
Switzerland: Consumer prices remained unchanged in August compared to a 0.7% decrease in July. On an annual basis, the CPI eased to 0.3% from 0.4% in July.
-
UK PMI for the service sector fell to 51.3 in August from 53.1 in July.
Today’s economic calendar:
-
US: Non-farm payrolls / unemployment rate for August
-
ISM: Non-manufacturing composite for August
-
Canada: No data
EUR- September
Luca Model: Long since September 1
The September euro opens a tad higher with help from positive Eurozone data after closing above the 21-day moving average for the first time in over three weeks. The short-term outlook is sideways. The medium-term outlook is sideways and my model is long. The long-term outlook remains bearish.
Initial resistance is at 1.2850. Further resistance is at 1.2895 from the 100-day moving average.
Immediate support is at 1.2800 from the 21-day moving average. Below 1.2745, Tuesday’s low is 1.2623.
INDICATORS
Fast stochastics: Bullish
MACD: Bearish
Ichimoku: Bullish
OUTLOOK
NEAR-TERM: Sideways
MEDIUM-TERM: Sideways
LONG-TERM: Bearish
JPY - September
Luca Model: Long since August 31
The September Japanese yen opens little changed in the US after closing basically flat on Thursday. It had climbed to a 15-year high last Tuesday. The short-term outlook is sideways. The medium-term outlook is bullish and my model is long again.
Immediate resistance is at 118.96. Tuesday’s high is 119.55 and the top of the uptrend is 119.66. Distant resistance is at 120.57.
Initial support is at 118.38. The next floors are 118.03 and 117.47 from the 21-day moving average. Monday’s low is 116.41.
INDICATORS
Fast stochastics: Sideways
MACD: Sideways
Ichimoku: Bullish
OUTLOOK
NEAR-TERM: Sideways
MEDIUM-TERM: Slightly bullish
LONG-TERM: Sideways
GBP - September
Luca Model: Short since August 10
The September pound opens little changed on the 21-day moving average in the US after closing slightly lower on Thursday. Nevertheless, it’s holding above the 200-day moving average. The short-term outlook is sideways. The medium-term outlook is sideways and my model is short.
The 200-day moving average supports at 1.5387. Further support is at 1.5332 from the 100-day moving average. Distant support is at 1.5160.
Immediate resistance is at 1.5465. The 21-day moving average resists at 1.5499. The next cap is 1.5607.
INDICATORS
Fast stochastics: Sideways
MACD: Bearish
Ichimoku: Bullish
OUTLOOK
NEAR-TERM: Sideways
MEDIUM-TERM: Sideways
LONG-TERM: Bearish
CHF - September
Luca Model: Long since August 16
The September Swiss franc opens little changed in the US after closing at the highest level of the uptrend. Thus, this strong currency avoided so far forming a hangman. The short-term outlook is sideways. The medium-term outlook is sideways and my model is long again.
The high of the uptrend is .9937. Further resistance is at 1.0028.
Initial support is at .9822. The next floor is .9779. The 21-day moving average supports at a distant .9695.
INDICATORS
Fast stochastics: Slightly bullish
MACD: Slightly bullish
Ichimoku: Bullish
OUTLOOK
NEAR-TERM: Sideways
MEDIUM-TERM: Slightly bullish
LONG-TERM: Sideways
CAD – September
Luca Model: Long since September 1
The September Canadian dollar opens little changed in the US after closing marginally lower on Thursday. The pullback paused the formation of a potential double bottom. The short-term outlook is sideways. The medium-term outlook is sideways and my model is long.
The 21-day moving average resists at .9530. Further resistance is at .9585 from the 55-day moving average.
Initial support is at .9479. Below .9425, there is additional support at .9385 and .9329.
INDICATORS
Fast stochastics: Slightly bullish
MACD: Bearish
Ichimoku: Bullish
OUTLOOK
NEAR-TERM: Sideways
MEDIUM-TERM: Sideways?
LONG-TERM: Sideways
AUD – September
Luca Model: Long since August 27
The overbought September Australian dollar remains firm after closing at an over three-week high on Thursday. It remains glued the median of the channel rising since June 8. The short-term outlook is sideways. The medium-term outlook is sideways and my model is long.
Thursday’s high is .9113. There are two pivot highs at .9183 and .9230.
Immediate support is at .9047. Below .9010, the 21-day moving average supports at .8954.
INDICATORS
Fast stochastics: Bullish
MACD: Sideways
Ichimoku: Bullish
OUTLOOK
NEAR-TERM: Sideways
MEDIUM-TERM: Sideways?
LONG-TERM: Sideways
