The appetite for risk was mixed on Thursday. The European currencies and yen ended lower and the commodity currencies higher on Thursday after closing divergently on Wednesday. The US stock markets ended mixed, but gold, oil and silver edged up. The market needs new information.
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: The initial jobless claims fell to 361,000 from the previous week's revised figure of 367,000.
- US: The trade balance showed a deficit of $42.9 billion in June, a 10.7% drop from the revised May level of $48 billion.
- Canada: The international merchandise trade showed a deficit of C$1.81 billion in June from -C$0.95 billion in May.
- Canada: The new housing price index slowed to 0.2% in July from 0.3% in June.
Today's economic calendar
- China: Trade Balance for July
- Australia: The RBA monetary policy statement
- Japan: Industrial production for June
EUR – September
Luca Model: Long since August 3
The September euro fell for a second day after marking a one-month high on Monday. It closed below 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 to slightly bearish. The medium-term outlook is bearish but my model is long.
Immediate support is at 1.2270. Further support is 1.2175.
Initial resistance is at 1.2450. Further resistance is at 1.2510.
INDICATORS
Fast stochastics: Slightly bearish
MACD: Sideways
Ichimoku: Sideways
OUTLOOK
NEAR-TERM: Sideways to slightly bearish
MEDIUM-TERM: Bearish
LONG-TERM: Bearish
JPY – September
Luca Model: Short since August 3
The September Japanese yen had an outside day on Thursday after alternating up and down days for eight days. It exited from an inside range only on an intraday basis. The yen is trading around 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.
Initial support is at 1.2690. Further support is at 1.2635.
Immediate resistance is at 1.2800. The next level is 1.2854. A pivot high is at 1.2895.
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 edged lower on Thursday after rallying on Wednesday on BoE Governor King’s hint for an interest rate cut. It is trading between the 100-day and the 21-day exponential moving averages. 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.
The 21-day exponential moving average supports at 1.5608. Further support is at 1.5570, 1.5500 and 1. 5456.
The 100-day exponentially smoothed moving average resists at 1.5680. Further resistance is at 1.5773.
INDICATORS
Fast stochastics: Sideways
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 sank for two days and closed below the 21-day exponential moving average on Wednesday. It had marked a one-month high on Monday. The franc bottomed at a 19-month low on July 24.
The short-term outlook is sideways to slightly bearish. The medium-term outlook is bearish and my model is long.
Immediate support is at 1.0220. The next floor is 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 to slightly bearish
MEDIUM-TERM: Bearish
LONG-TERM: Bearish
CAD – September
Luca Model: Long since June 29
The September Canadian dollar advanced for a fifth day and marked a new three-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. It should attempt a mild correction into the end of the week before the next move higher.
The short-term outlook is sideways. The medium-term outlook is bullish and my model is long.
Thursday’s high is 1.0083. Good resistance is 1.0115. A pivot high is at 1.0168.
Initial support is at 1.0030. Further support is at .9915 and .9785.
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 ended off a new high for the uptrend. The Aussie has been advancing since June 4.
The short-term outlook is sideways to slightly bullish. The medium-term outlook is bullish and my model is long.
The high of the uptrend is 1.0578. Further resistance is at 1.0620.
Initial support is at 1.0490. The next floor is 1.0410.
INDICATORS
Fast stochastics: Bullish
MACD: Sideways
Ichimoku: Bullish
OUTLOOK
NEAR-TERM: Sideways to slightly bullish
MEDIUM-TERM: Bullish
LONG-TERM: Sideways
