The appetite for risk is relatively firm on hopes that both the ECB and the Fed will ease as early as this week in order to ease the Eurozone debt crisis and boost the sagging US economy. News came that China will increase its policy fine-tuning in the second half to support economic growth, despite signs of stabilization in the economy.
The foreign currencies open in the US the same way they moved on Monday: the European currencies little changed and the commodity currencies and the yen up. The European bourses are mixed, while the US stock markets are up in pre-open trading. Gold, oil and silver are also up.
The short-term outlook for the foreign currencies is generally 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
UK: The Gfk consumer confidence was unchanged at -29 in July.
Australia: Building permits fell 2.5% in June.
Japan: Overall household spending rose 1.6% on year in June.
Japan: The unemployment rate eased to 4.3% in June from 4.4% in May.
Japan: The Nomura/ JMMA Manufacturing PMI declined 47.9 in July from 49.9 in June.
Eurozone: The annual inflation rate remained stable at 2.4% in July.
Eurozone: The unemployment rate remained unchanged at a record high of 11.2% in June.
Germany: The jobless rate was at 6.8% in July, unchanged from the past few months.
Germany: Retail sales fell 0.1% in June after falling 0.3% in May.
France: Household spending edged up 0.1% in June, following a 0.5% gain in each of the previous two months.
France: The producer price index increased 1.3% on an annual basis in June.
Italy: The unemployment rate increased to 10.8% in June from 10.6% in May.
Switzerland: The UBS consumption indicator climbed to 1.60 in June from 1.02 in May.
Today's economic calendar
US: Personal income for June
US: S&P/Case-Shiller Home Price Indices for May
US: Chicago Purchasing Managers' Index for July
US: Consumer confidence for July
Canada: Gross Domestic Product for May
Canada: Industrial product price / raw material price index for June
EUR – September
Luca Model: Short since May 7
The oversold September euro opens below the 21-day exponentially smoothed moving after slipping on Monday and 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.
Immediate support is 1.2247. Further support is at 1.2200 and 1.2125.
The 21-day exponentially smoothed moving average caps at 1.2300. Friday’s high at 1.2397. Further resistance is at 1.2475.
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 remains firm after advancing on Monday and falling from a 1 ½-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 long.
Initial resistance is at 1.2815. Thursday’s peak was 1.2854. A pivot high is at 1.2895.
The 21-day exponentially smoothed moving average supports at 1.2707. 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 is consolidating around the 100-day exponentially smoothed moving average in the wake of 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 1.5615.
Further support is at 1.5570.
Immediate resistance is at 1.5773. Further resistance is at 1.5895.
INDICATORS
Fast stochastics: Sideways
MACD: Slightly bullish
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 remains below the 21-day exponentially smoothed moving average where it slipped on Monday 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.
Initial support is at 1.0190. The next floor is 1.0150. Tuesday’s low is 1.0040.
The 21-day exponentially smoothed moving average cap at 1.0248. Further resistance is at 1.0325.
INDICATORS
Fast stochastics: Slightly bearish
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 is advancing for a fifth day and reached another 2 ½-month high. 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 slightly bullish. The medium-term outlook is bullish and my model is long. A pivot high is at 1.0168.
Immediate resistance is at 1.0015. Further resistance is at 1.0055. A pivot high is at 1.0168.
Initial support is at .9915. The 21-day exponentially smoothed moving average supports at .9858.
INDICATORS
Fast stochastics: Bullish
MACD: Bullish
Ichimoku: Bullish
OUTLOOK
NEAR-TERM: Slightly bullish
MEDIUM-TERM: Bullish
LONG-TERM: Sideways
AUD – September
Luca Model: Long since June 29
The September Australian dollar opens at a new high for the uptrend. It has been advancing overall since June 4.
The short-term outlook is slightly bullish. The medium-term outlook is bullish and my model is long.
Immediate resistance is at 1.0550. Further resistance is at 1.0610.
Initial support is at 1.0440. The next floors are 1.0390, 1.0335 and 1.0255.
INDICATORS
Fast stochastics: Bullish
MACD: Bullish
Ichimoku: Bullish
OUTLOOK
NEAR-TERM: Slightly bullish
MEDIUM-TERM: Bullish
LONG-TERM: Sideways
