The appetite for risk is mixed ahead of the US open at the start of the second quarter. Profit taking kicked in some of the markets after surging on Friday on news that the EU politicians are finally addressing the debilitating regional debt crisis. The European currencies slipped on profit taking after surging on Friday but the commodity currencies retain their strength. Most of the Asia/Pacific stock indexes advanced. The European bourses are up, and the US stock markets are little changed in pre-open trading. Gold, oil and silver are trading lower
The short-term outlook for most of 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 the European currencies and yen.
Overnight
China: The NBS manufacturing PMI fell to 50.2 in June from 50.4 in May.
Australia: The AIG index measuring manufacturing conditions rose to 47.2 in June from 42.4 in May.
Australia: The TD securities inflation slipped 0.2% in June from flat in May.
Japan: Tankan large manufacturing outlook improved to -1.0 in the second quarter from -4.0 in the first quarter.
Eurozone: The Purchasing Managers' Index for the manufacturing sector remained unchanged at 45.1 in June.
Eurozone: The unemployment rate rose to a record 11.1% in May from 11% in April.
Italy: The unemployment rate fell to 10.1% in May from 10.2% in April.
Switzerland: Retail sales grew 1% in May, partially offsetting the 1.3% drop in April.
Switzerland: The SVME - Purchasing Managers' Index rose to 48.1 in June from 45.4 in May.
United Kingdom: Manufacturing PMI rose to 48.6 in June from 45.9 in May.
Today's economic calendar
United States: Manufacturing PMI for June
United States: Construction spending for May
United States: ISM manufacturing PMI for June
EUR – September
Luca Model: Short since May 7
The September euro opens slightly lower in the US after soaring above the 21-day exponentially smoothed moving average on Friday. The euro had bottomed near a two-year low on June 1.
The short-term outlook is sideways. The medium-term outlook is bearish and my model is short.
The 21-day exponentially smoothed moving average supports at 1.2590. Further support is at 1.2530 and 1.2475.
A pivot high is 1.2759. Further resistance is at 1.2900.
INDICATORS
Fast stochastics: Sideways
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 opens up in the US after falling on Friday from an eight-day high and is trading just above the 21-day exponentially smoothed moving average. It is stuck in an inside range.
The short-term outlook is sideways. The medium-term outlook is slightly bullish but my model is short.
Initial resistance is at 1.2653. Further is at 1.2700.
Immediate support is at 1.2515. 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 opens a little lower in the US after climbing to an eight-day high on Friday. The pound is trading above 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 supports at 1.5618. Further support is at 1.5515.
Friday’s high was 1.5713. A pivot high is at 1.5773.
INDICATORS
Fast stochastics: Sideways
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 opens marginally lower in the US after soaring to an eight-day high on Friday. It is trading above 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.
The 21-day exponentially smoothed moving average supports at 1.0496. Further support is at 1.0363.
Immediate resistance is at 1.0595. Further resistance is at 1.0670.
INDICATORS
Fast stochastics: Sideways
MACD: Sideways
Ichimoku: Bearish
OUTLOOK
NEAR-TERM: Sideways
MEDIUM-TERM: Bearish
LONG-TERM: Sideways
CAD – September
Luca Model: Long since June 29
The September Canadian opens near a 1 ½-month high after surging on Friday. It moved well above the 21-day exponentially smoothed moving average and just above the 55-day exponentially smoothed moving average. 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 went long.
The 100-day exponentially smoothed moving average resists at .9864. Further resistance is at .9940.
The 21-day exponentially smoothed moving average supports at .9748. The next floor is .9690.
INDICATORS
Fast stochastics: Sideways
MACD: Slightly bullish
Ichimoku: Sideways
OUTLOOK
NEAR-TERM: Sideways
MEDIUM-TERM: Sideways
LONG-TERM: Slightly bullish
AUD – September
Luca Model: Long since June 29
The overbought September Australian dollar opens at a two-month high in the US after surging on Friday. It has been advancing since June 4.
The short-term outlook is sideways to slightly bullish. The medium-term outlook is sideways and my model went long.
Immediate resistance is at 1.0220. Further resistance is at 1.0320.
Initial support is at 1.0150. The 21-day exponentially smoothed moving average supports at a distant .9970.
INDICATORS
Fast stochastics: Bullish
MACD: Slightly bullish
Ichimoku: Slightly bullish
OUTLOOK
NEAR-TERM: Sideways to slightly bullish
MEDIUM-TERM: Sideways
LONG-TERM: Sideways
