The European and commodity currencies remain under pressure after buckling on Friday under concern that the US economy is heading for another recession and that Spain will require a full-scale bailout. All eyes remain on the euro and franc, which took their downtrends to new lows. The Asia/Pacific stock indexes sank, echoing the US markets.
The short-term outlook for the European and commodity currencies is sideways to slightly bearish. The medium-term outlook for most of the foreign currencies is sideways. The LGR short-term model is short only the euro and franc.
Good luck!
Overnight
- Australia: The Producer Price Index rose 0.5% in the second quarter after contracting 0.3% in the first quarter.
Today's economic calendar
- Eurozone: Consumer confidence for July
- UK: Nationwide housing prices for June
EUR – September
Luca Model: Short since May 7
The oversold September euro slipped to an over two-year low in the Far East after sliding on Friday. The euro should remain under overall pressure.
The short-term outlook is sideways to slightly bearish. The medium-term outlook is bearish and my model is short.
Immediate support is 1.2095. Further support is at 1.1965.
Initial resistance is at 1.2225. The 21-day exponentially smoothed moving average resists at 1.2345.
INDICATORS
Fast stochastics: Bearish
MACD: Bearish
Ichimoku: Bearish
OUTLOOK
NEAR-TERM: Sideways to slightly bearish
MEDIUM-TERM: Bearish
LONG-TERM: Bearish
JPY – September
Luca Model: Long since July 16
The September Japanese yen consolidated in Asia after advancing in six of the last seven days and powering to a one-month high on Thursday. 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.
Initial resistance is at 1.2766. Further resistance is at 1.2895.
Immediate support is at 1.2695. The 21-day exponentially smoothed moving average supports at 1.2645. Distant support is at 1.2514.
INDICATORS
Fast stochastics: Bullish
MACD: Slightly bullish
Ichimoku: Slightly bullish
OUTLOOK
NEAR-TERM: Sideways
MEDIUM-TERM: Slightly bullish
LONG-TERM: Sideways
GBP – September
Luca Model: Long since July 19
The September pound slipped below the 21-day exponentially smoothed moving after sliding on Friday. It had peaked at a one-month high on Thursday. 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 to slightly bearish. The medium-term outlook is sideways and my model is long.
Initial support is at 1.5520. Further support is at 1.5450.
The 55-day exponentially smoothed moving average caps at 1.5655 and the 200-day exponentially smoothed moving average at 1.5761. Distant resistance is at 1.5895.
INDICATORS
Fast stochastics: Bearish
MACD: Slightly bullish
Ichimoku: Sideways
OUTLOOK
NEAR-TERM: Sideways to slightly bearish
MEDIUM-TERM: Sideways
LONG-TERM: Sideways
CHF – September
Luca Model: Short since May 2
The oversold September Swiss franc is trading at a 19-month low after crashing on Friday. It trades well below the 21-day exponentially smoothed moving average.
The short-term outlook is sideways to slightly bearish. The medium-term outlook is bearish and my model is short.
Initial support is at 1.0090. Further support is at 1.0045 and .9965.
Immediate resistance is at 1.0195. The 21-day exponentially smoothed moving average resists at 1.0287.
INDICATORS
Fast stochastics: Bearish
MACD: Slightly bearish
Ichimoku: Bearish
OUTLOOK
NEAR-TERM: Sideways to slightly bearish
MEDIUM-TERM: Bearish
LONG-TERM: Bearish
CAD – September
Luca Model: Long since June 29
The September Canadian dollar is trading lower around the 100-day exponentially smoothed moving average after putting in a medium-term peak at a two-month high on Thursday and sliding on Friday. 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 to slightly bearish. The medium-term outlook is sideways and my model is long.
The 21-day supports at .9817. The next floors are .9720 and .9632.
Immediate resistance is at .9921. The next cap is 1.0015.
INDICATORS
Fast stochastics: Bearish
MACD: Bullish
Ichimoku: Slightly bullish
OUTLOOK
NEAR-TERM: Sideways to slightly bearish
MEDIUM-TERM: Sideways
LONG-TERM: Sideways
AUD – September
Luca Model: Long since June 29
The September Australian dollar is trading lower after falling on Friday and peaking at a four-month high on Thursday. It has been advancing overall since June 4 and is not overbought any longer.
The short-term outlook is sideways to slightly bearish. The medium-term outlook is bullish and my model is long.
Initial support is 1.0225. The 21-day exponentially smoothed moving average supports at a distant 1.0162.
Immediate resistance is at 1.0305. A pivot high is at 1.0389. Distant resistance is at 1.0525.
INDICATORS
Fast stochastics: Bearish
MACD: Slightly bullish
Ichimoku: Slightly bullish
OUTLOOK
NEAR-TERM: Sideways to slightly bearish
MEDIUM-TERM: Bullish
LONG-TERM: Sideways
