The appetite for risk is limited ahead of the US open after surging in the second half of last week on hopes that both ECB and the Fed will ease as early as this week in order to alleviate the Eurozone debt crisis and support the deteriorating US economy. Now, these central banks are faced to the task of having to meet these expectations. The European and commodity currencies open little changed after surging since Wednesday, while the yen is up. The Asia/Pacific stock indexes rallied. The European bourses are up, while the US stock markets are marginally lower in pre-open trading.
The short-term outlook for the European and commodity currencies is sideways. 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: Industrial production slipped 0.1% in June after sliding 3.4% in May.
Australia: Home sales rose 2.8% year-on-year in June, the Housing Industry Association said.
Eurozone: Gross Domestic Product declined 0.3% in the second quarter, the same as in the previous two quarters.
Eurozone: The economic sentiment index fell to 87.9 in July 89.9 in June. Industrial confidence fel to -15 from -12.8 and services confidence fell to -8.5 from -7.4.
UK: The number of mortgages approved in June fell to 44,192 from 50,544 in May.
Today's economic calendar
- No data
EUR – September
Luca Model: Short since May 7
The oversold September euro opens around the 21-day exponentially smoothed moving average in the Far East after forming a bullish reversal on Wednesday and surging since then. It had bottomed an over two-year low early last week. The euro should remain under overall pressure.
The short-term outlook is sideways. The medium-term outlook is bearish and my model is short.
Friday’s high at 1.2397. Further resistance is at 1.2475.
Immediate support is 1.2247. Further support is at 1.2200 and 1.2125.
INDICATORS
Fast stochastics: Sideways
MACD: Sideways
Ichimoku: Sideways
OUTLOOK
NEAR-TERM: Sideways
MEDIUM-TERM: Bearish
LONG-TERM: Bearish
JPY – September
Luca Model: Long since July 16
The September Japanese yen opens higher in the US after falling from a 1 ½-month high on Thursday to a one-week low on Friday. 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.
Initial resistance is at 1.2815. Thursday’s peak was 1.2854. A pivot high is at 1.2895.
Immediate support is at 1.2735. The 21-day exponentially smoothed moving average supports at 1.2697. Further support is at 1.2645.
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 opens little changed in the US after soaring to a five-week high on Friday. It broke out of a symmetrical triangle. The pound had peaked at a one-month high last week. It 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 sideways and my model is long.
Initial support is at 1.5650. The 21-day exponentially smoothed moving average supports at 1.5606.
Further support is at 1.5570.
Immediate resistance is at 1.5773. Further resistance is at 1.5895.
INDICATORS
Fast stochastics: Bullish
MACD: Sideways
Ichimoku: Sideways
OUTLOOK
NEAR-TERM: Sideways
MEDIUM-TERM: Sideways
LONG-TERM: Sideways
CHF – September
Luca Model: Short since May 2
The oversold September Swiss franc opens around the 21-day exponentially smoothed moving average in Asia after surging to a three-week high on Friday. It bottomed at a 19-month low on Tuesday
The short-term outlook is sideways. The medium-term outlook is bearish and my model is short.
Immediate resistance is at 1.0325. Further resistance is at 1.0430.
Initial support is at 1.0205. The next floor is 1.0150. Tuesday’s low is 1.0040.
INDICATORS
Fast stochastics: Bullish
MACD: Sideways
Ichimoku: Bearish
OUTLOOK
NEAR-TERM: Sideways
MEDIUM-TERM: Bearish
LONG-TERM: Bearish
CAD – September
Luca Model: Long since June 29
The September Canadian dollar remains firm after closing at a 2 ½-month high 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. The medium-term outlook is bullish and my model is long.
Immediate resistance is at .9990. Further resistance is at 1.0055.
Initial support is at .9915. The 21-day exponentially smoothed moving average supports at .9844. A distant floor is .9760.
INDICATORS
Fast stochastics: Bullish
MACD: Bullish
Ichimoku: Bullish
OUTLOOK
NEAR-TERM: Sideways
MEDIUM-TERM: Bullish
LONG-TERM: Sideways
AUD – September
Luca Model: Long since June 29
The September Australian dollar remains strong after surging to a new high for the uptrend on Friday. It has been advancing overall since June 4.
The short-term outlook is sideways. The medium-term outlook is bullish and my model is long.
Immediate resistance is at 1.0460. Further resistance is at 1.0550 and 1.0610.
Initial support is at 1.0390. The next floors are 1.0335 and 1.0255. The 21-day exponentially smoothed moving average follows at a distant 1.0229.
INDICATORS
Fast stochastics: Bullish
MACD: Bullish
Ichimoku: Bullish
OUTLOOK
NEAR-TERM: Sideways
MEDIUM-TERM: Bullish
LONG-TERM: Sideways
