The foreign currencies consolidated in the Far East after the European and commodity currencies fell and the yen rose on Thursday. There are timid hopes for partial success from the EU summit, but the regional debt crisis is far from being alleviated. Germany's parliament will finally approve on Friday the euro zone's permanent bailout mechanism and new European budget rules drawn up by Chancellor Angela Merkel, but ratification of these tools faces legal hurdles. The Asia/Pacific stock indexes were mixed.
The short-term outlook for the European and commodity currencies is sideways. The medium-term outlook for most of the foreign currencies is bearish. The LGR short-term model is short on all the foreign currencies.
Good luck!
Overnight
- Australia: Private sector credit rose 0.5% in May from +0.4% in April.
- Japan: The national CPI slowed to 0.2% in the year to May from +0.4% in April. The core CPI fell 0.6% after declining 0.3%.
- Japan: Tokyo CPI fell 0.6% in June y-o-y after declining 0.5% in May. The core CPI fell 1.0%, less than -1.3% in May.
- Japan: The unemployment rate declined to 4.4% in May from 4.6% in April.
- Japan: Overall household spending rose 4.0% in May after expanding 2.6% in April.
- Japan: Industrial production slumped 3.1% in May after easing 0.2% in April.
Today's economic calendar
- European Monetary Union: Consumer Price Index for June
- Germany: Retail sales for May
- Switzerland: KOF leading indicator for June
- United Kingdom: Index of Services for April
EUR – September
Luca Model: Short since May 7
The September euro marked time in the Far East after falling for four days and hitting a 3 ½-week low on Thursday. It is trading below the 21-day exponentially smoothed moving average. The euro had bottomed near a two-year low on June 1 after sliding nearly every day since peaking on May 1.
The short-term outlook is sideways. The medium-term outlook is bearish and my model is short.
Immediate support is at 1.2400. A pivot low is at 1.2298.
Initial resistance is at 1.2535. The 21-day exponentially smoothed moving average resists at 1.2563. A pivot high is 1.2750.
INDICATORS
Fast stochastics: Bearish
MACD: Sideways
Ichimoku: Slightly bullish
OUTLOOK
NEAR-TERM: Sideways
MEDIUM-TERM: Bearish
LONG-TERM: Sideways
JPY – September
Luca Model: Short since June 21
The September Japanese yen marched higher to an eight-day high in Asia after closing above the 21-day exponentially smoothed moving average on Thursday. The short-term outlook is sideways. The medium-term outlook is slightly bullish but my model went short.
Initial resistance is at 1.2650. Further resistance is at 1.2700.
The 21-day exponentially smoothed moving average supports at 1.2595 and the 55-day exponentially smoothed moving average at 1.2557. A pivot low is at 1.2416.
INDICATORS
Fast stochastics: Bullish
MACD: Slightly bearish
Ichimoku: Sideways
OUTLOOK
NEAR-TERM: Sideways
MEDIUM-TERM: Slightly bullish
LONG-TERM: Sideways
GBP – September
Luca Model: Short May 15
The September pound edged up in the Far East after extending Wednesday’s losses to a two-week low on Thursday. The pound is trading below the 21-day exponentially smoothed moving average. It had put in a medium-term top at a one-month high on June 20. The pound had formed a medium-term peak at an eight-month high on April 30 and bottomed at a 4 1/2-month low on June 1.
The short-term outlook is sideways. The medium-term outlook is slightly bearish and my model is short.
The 21-day exponentially smoothed moving average caps at 1.5597. Further resistance is at 1.5650. A pivot high is at 1.5773.
Immediate support is at 1.5455. Further support is at 1.5320.
INDICATORS
Fast stochastics: Bearish
MACD: Slightly bullish
Ichimoku: Sideways
OUTLOOK
NEAR-TERM: Sideways
MEDIUM-TERM: Bearish
LONG-TERM: Sideways
CHF – September
Luca Model: Short since May 2
The September Swiss franc was quiet in Asia after falling for four days and hitting a 3 ½-week low on Thursday. It is trading below the 21-day exponentially smoothed moving average. The franc, which has been falling since peaking on May 1, bottomed at a 15-month low on June 1.
The short-term outlook is sideways. The medium-term outlook is bearish and my model is short.
A pivot low is at 1.0280.
Immediate resistance is at 1.0407. The 21-day exponentially smoothed moving average resists at 1.0475 and the 55-day exponentially smoothed moving average at 1.0613.
INDICATORS
Fast stochastics: Sideways
MACD: Slightly bearish
Ichimoku: Bearish
OUTLOOK
NEAR-TERM: Sideways
MEDIUM-TERM: Bearish
LONG-TERM: Sideways
CAD – September
Luca Model: Short since May 7
The September Canadian edged up in Asia after falling from a one-week high to a 3 ½-week low on Thursday. It is trading well below the 21-day moving after advancing. The loonie had peaked on April 27 and bottomed at a 5 1/2-month low on June 1.
The short-term outlook is sideways. The medium-term outlook is slightly bearish and my model is short.
The 21-day exponentially smoothed moving average resists at .9727 and the 55-day exponentially smoothed moving average at .9806.
Immediate support is .9620. A pivot low is at .9554.
INDICATORS
Fast stochastics: Bearish
MACD: Slightly bearish
Ichimoku: Sideways
OUTLOOK
NEAR-TERM: Sideways
MEDIUM-TERM: Sideways
LONG-TERM: Slightly bullish
AUD – September
Luca Model: Short since April 30
The overbought September Australian dollar edged higher in the Far East after tumbling from a one-week high to below the 55-day exponentially smoothed moving average. It has been advancing since June 4 and marked a 1 ½-month high on June 20. It is trading above the 200-day exponentially smoothed moving average.
The short-term outlook is sideways. The medium-term outlook is sideways and my model is short.
Immediate resistance is at 1.0040. A pivot high is at 1.0142.
The 21-day supports at .9932. Distant support is at .9815.
INDICATORS
Fast stochastics: Bearish
MACD: Slightly bullish
Ichimoku: Sideways
OUTLOOK
NEAR-TERM: Sideways
MEDIUM-TERM: Bearish
LONG-TERM: Sideways
