The financial markets remain adverse to risk, as renewed concerns about the Eurozone debt crisis and US economic weakness were enhanced by Apple’s big earnings and revenue miss. The European and commodity currencies are under pressure after resuming losses on Tuesday. Meanwhile, the yen remains in demand. The Asia stock indexes are falling.
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.
Overnight
Japan: The merchandise trade balance showed a surplus of 61.7 billion yen in June following the downwardly revised deficit of 910.4 billion yen in May.
Australia: Conference Board Leading Index rose 0.4% in May after falling 1.4% in April.
Australia: Consumer Price Index for the second quarter
Today's economic calendar
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Germany: IFO - business climate for July
Italy: Consumer confidence for July
UK: Gross Domestic Product for the second quarter
UK: CBI industrial trends survey - orders for July
EUR – September
Luca Model: Short since May 7
The oversold September euro is weak after resuming losses and falling to an over two-year low on Tuesday. 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 1.2050. Further support is at 1.1965.
Initial resistance is at 1.2155. The next cap is 1.2225. The 21-day exponentially smoothed moving average resists at 1.2297.
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 has been advancing in nine of the last ten days and spiked to a 1 ½-month 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 long.
Monday’s peak was 1.2839. A pivot high is at 1.2895.
Immediate support is at 1.2770. The 21-day exponentially smoothed moving average supports at 1.2672.
INDICATORS
Fast stochastics: Slightly bullish
MACD: Slightly bullish
Ichimoku: Slightly bullish
OUTLOOK
NEAR-TERM: Sideways
MEDIUM-TERM: Bullish
LONG-TERM: Sideways
GBP – September
Luca Model: Long since July 19
The September pound is soft after falling since Friday and breaking below the 21-day exponentially smoothed moving average. 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 1.5460. Further support is at 1.5390.
The 21-day exponentially smoothed moving average resists at 1.5573 and 55-day exponentially smoothed moving average caps at 1.5642.
INDICATORS
Fast stochastics: Bearish (oversold)
MACD: Sideways
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 on the ropes after resuming losses and hitting a new 19-month low on Tuesday. It is moving 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 1.0040. Further support is at .9965.
Immediate resistance is at 1.0140. The next cap is 1.0195. The 21-day exponentially smoothed moving average resists at 1.0247.
INDICATORS
Fast stochastics: Bearish
MACD: 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 falling for a fourth day and trading below the 21-day exponentially smoothed moving average. The loonie had formed in a medium-term peak at a two-month high on Thursday. 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.
Initial support is at .9740. The next floor is .9632.
The 21-day exponentially smoothed moving average caps at .9807. Further resistance is at .9860 and .9921.
INDICATORS
Fast stochastics: Bearish (oversold)
MACD: Slightly bearish
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 falling for a fourth day and trading below the 21-day exponentially smoothed moving average. It had peaked 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 to slightly bearish. The medium-term outlook is bullish and my model is long.
Immediate support is at 1.0075. Further support is at 1.0040.
Immediate resistance is at 1.0180. The next cap is 1.0260. A pivot high is at 1.0389.
INDICATORS
Fast stochastics: Bearish
MACD: Slightly bearish
Ichimoku: Sideways
OUTLOOK
NEAR-TERM: Sideways to slightly bearish
MEDIUM-TERM: Bullish
LONG-TERM: Sideways
