The appetite for risk remained relatively firm in the Far East after recovering since Friday. The market is finally dealing with the Federal Reserve status quo; Chairman Ben Bernanke reiterated that the Fed is prepared to take further action to jump start the sluggish US recovery, but offered no hints regarding another round of quantitative easing.
The foreign currencies are consolidating after the European and commodity currencies advanced for three days. The Asian stock markets are 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 the European currencies and yen.
Good luck!
Overnight
- Australia: The Westpac Leading Index rose 0.8% in May from 0.5% in April.
- Japan: The BoJ Monetary Policy Meeting Minutes
- Japan: Machine tool orders for June
Today's economic calendar
- EMU: Construction output for May
- Switzerland: ZEW survey - expectations for July
- UK: Bank of England minutes
- UK: ILO unemployment Rate for July
EUR – September
Luca Model: Short since May 7
The oversold September euro remained firm in Asia after advancing for three days and reaching a one-week high. It had hit a two-year low on Thursday. The euro should remain under overall pressure.
The short-term outlook is sideways. The medium-term outlook is bearish and my model is short.
Initial resistance is at 1.2375. The 21-day exponentially smoothed moving average resists at 1.2400.
Immediate support is at 1.2275. Friday’s low is 1.2171.
INDICATORS
Fast stochastics: Slightly bullish
MACD: Bearish
Ichimoku: Bearish
OUTLOOK
NEAR-TERM: Sideways
MEDIUM-TERM: Bearish
LONG-TERM: Bearish
JPY – September
Luca Model: Short since June 21
The September Japanese yen consolidated in the Far East after slipping on Tuesday and advancing to a four-week high on Monday. It is trading in a rising channel.
The short-term outlook is sideways. The medium-term outlook is slightly bullish but my model is short.
The 21-day exponentially smoothed moving average supports at 1.2605. Further support is at 1.2490.
Initial resistance is at 1.2735. Further resistance is at 1.2895.
INDICATORS
Fast stochastics: Sideways
MACD: Slightly bullish
Ichimoku: Slightly bullish
OUTLOOK
NEAR-TERM: Sideways
MEDIUM-TERM: Slightly bullish
LONG-TERM: Sideways
GBP – September
Luca Model: Short May 15
The September pound marked time at high levels in Asia after advancing for three days and hitting an 11-day high on Tuesday. It is challenging the 55-day exponentially smoothed moving average. 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 and is currently approaching the tip of a symmetrical triangle.
The short-term outlook is sideways. The medium-term outlook is slightly bearish and my model is short.
The 100-day exponentially smoothed moving average caps at 1.5710. Further resistance is at 1.5775.
The 21-day exponentially smoothed moving average supports at 1.5583. Further support is at 1.5510 and 1.5450.
INDICATORS
Fast stochastics: Bullish
MACD: Sideways
Ichimoku: Sideways
OUTLOOK
NEAR-TERM: Sideways
MEDIUM-TERM: Bearish
LONG-TERM: Sideways
CHF – September
Luca Model: Short since May 2
The oversold September Swiss franc consolidated in the Far East after rising for three days and reaching a one-week high. It has apparently bottomed at a 1 1/2-year low on Friday. It trades in an inside range well below the 21-day exponentially smoothed moving average.
The short-term outlook is sideways. The medium-term outlook is bearish and my model is short.
Immediate resistance is at 1.0300. The 21-day exponentially smoothed moving average resists at 1.0333.
Immediate support is at 1.0215. A pivot low is at 1.0142.
INDICATORS
Fast stochastics: Bullish
MACD: Slightly bearish
Ichimoku: Bearish
OUTLOOK
NEAR-TERM: Sideways
MEDIUM-TERM: Bearish
LONG-TERM: Bearish
CAD – September
Luca Model: Long since June 29
The September Canadian dollar marched up to a 12-day high in Asia and above the 100-day exponentially smoothed moving average. It is trading in a wide channel rising since June 4. 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 sideways and my model is long.
A pivot high is at .9885. The next cap is .9940.
The 21-day exponentially smoothed moving average supports at .9799. The next floors are .9720 and .9632.
INDICATORS
Fast stochastics: Bullish
MACD: Bullish
Ichimoku: Slightly bullish
OUTLOOK
NEAR-TERM: Sideways
MEDIUM-TERM: Sideways
LONG-TERM: Sideways
AUD – September
Luca Model: Long since June 29
The September Australian dollar extended gains to a new 2 ½-month high in the Far East after climbing since Friday. It is holding well above the 21-day exponentially smoothed moving average. The Aussie peaked at a two-month high last Thursday. It has been advancing overall since June 4.
The short-term outlook is sideways to slightly bullish. The medium-term outlook is sideways and my model is long.
A pivot high is at 1.0325. Further resistance is at 1.0410.
Initial support is 1.0215. The 21-day exponentially smoothed moving average supports at 1.0108.
INDICATORS
Fast stochastics: Bullish
MACD: Sideways
Ichimoku: Sideways
OUTLOOK
NEAR-TERM: Sideways to slightly bullish
MEDIUM-TERM: Sideways
LONG-TERM: Sideways
