The financial markets took some risk off on Wednesday. The European currencies slipped after consolidating this week and surging on Friday. The commodity currencies advanced. The US stock markets made little progress. Gold, oil and silver ended lower. Traders need fresh news after overreacting last week to the lack of central banks’ easing and then getting caught in a short squeeze on Friday.
The short-term outlook for the foreign currencies is sideways. The medium-term outlook for most of the foreign currencies is sideways. The LGR short-term model is short only the yen.
Good luck!
Overnight
- US: Productivity increased 1.6% in the second quarter following a revised 0.5% drop in the first quarter.
Today's economic calendar
- UK: RICS Housing Price Balance for July
- Japan: Machinery orders for June
- China: Consumer Price Index for July
- China: Producer Price Index for July
- Australia: Unemployment rate for July
- Japan: The BoJ will leave interest rates at 0.1%
- Japan: Consumer Confidence Index for July
- China: Industrial production for July
- China: Retail sales for July
- Japan: Machine tool orders for July
EUR – September
Luca Model: Long since August 3
The September euro slipped to the low of the week on Wednesday after marking a one-month high on Monday. It is holding above the 21-day exponential moving average. The euro had bottomed an over two-year low last week, but should remain under overall pressure.
The short-term outlook is sideways. The medium-term outlook is bearish but my model is long.
The 21-day exponentially smoothed moving average supports at 1.2317. Further support is 1.2175.
Initial resistance is at 1.2450. Further resistance is at 1.2510.
INDICATORS
Fast stochastics: Slightly bearish
MACD: Slightly bullish
Ichimoku: Sideways
OUTLOOK
NEAR-TERM: Sideways
MEDIUM-TERM: Bearish
LONG-TERM: Bearish
JPY – September
Luca Model: Short since August 3
The September Japanese yen has been alternating up and down days for seven days and Wednesday was the up day. It remains in an inside range. The yen is trading below the 21-day exponentially smoothed moving average. A 1 ½-month peak remains in place. The yen is trading in a rising channel.
The short-term outlook is sideways. The medium-term outlook is slightly bullish but my model is short.
Immediate resistance is at 1.2800. The next level is 1.2854. A pivot high is at 1.2895.
Initial support is at 1.2700. Further support is at 1.2635.
INDICATORS
Fast stochastics: Sideways
MACD: Sideways
Ichimoku: Slightly bullish
OUTLOOK
NEAR-TERM: Sideways
MEDIUM-TERM: Slightly bearish
LONG-TERM: Sideways
GBP – September
Luca Model: Long since July 19
The September pound reversed early losses on after BoE Governor King gave a dovish speech about the economy, but hinted an interest rate cut. It remains below the 100-day exponentially smoothed moving average. The pound is trading in a symmetrical triangle. It had peaked at a one-month high last week. 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. The medium-term outlook is sideways and my model is long.
Immediate resistance is at 1.5680. Further resistance is at 1.5773.
Initial support is at 1.5570. Further support is at 1.5500 and 1. 5456.
INDICATORS
Fast stochastics: Slightly bullish
MACD: Sideways
Ichimoku: Sideways
OUTLOOK
NEAR-TERM: Sideways
MEDIUM-TERM: Sideways
LONG-TERM: Sideways
CHF – September
Luca Model: Long since August 3
The September Swiss franc edged lower on Wednesday after marking a one-month high on Monday and rallying on Friday. It is trading above the 21-day exponential moving average. The franc bottomed at a 19-month low on July 24.
The short-term outlook is sideways. The medium-term outlook is bearish and my model is long.
Immediate support is at 1.0260. The next support is at 1.0110. Thursday’s low is 1.0042.
Initial resistance is at 1.0366. Further resistance is at 1.0500.
INDICATORS
Fast stochastics: Slightly bearish
MACD: Bullish
Ichimoku: Sideways
OUTLOOK
NEAR-TERM: Sideways
MEDIUM-TERM: Bearish
LONG-TERM: Bearish
CAD – September
Luca Model: Long since June 29
The September Canadian dollar marched higher for a fourth day and marked a new three-month high on Wednesday. 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 bullish. The medium-term outlook is bullish and my model is long. A pivot high is at 1.0168.
Good resistance is 1.0115. A pivot high is at 1.0168.
Initial support is at .9915. Further support is at .9900 and .9785.
INDICATORS
Fast stochastics: Bullish
MACD: Bullish
Ichimoku: Bullish
OUTLOOK
NEAR-TERM: Sideways to slightly bullish
MEDIUM-TERM: Bullish
LONG-TERM: Sideways
AUD – September
Luca Model: Long since June 29
The September Australian dollar reversed early losses and closed slightly higher on Wednesday. It had reached a new the high for the uptrend on Tuesday. The Aussie has been advancing since June 4.
The short-term outlook is sideways. The medium-term outlook is bullish and my model is long.
The top of the uptrend is 1.0564. Further resistance is at 1.0620.
Initial support is at 1.0490. The next floor is 1.0410. Distant support is at 1.0345.
INDICATORS
Fast stochastics: Slightly bullish
MACD: Sideways
Ichimoku: Bullish
OUTLOOK
NEAR-TERM: Sideways
MEDIUM-TERM: Bullish
LONG-TERM: Sideways
