The appetite for risk is limited ahead of the US open. The market will focus on the Fed’s minutes later in the day, but there should be no surprises. The European currencies and yen open little changed after being vaulted recently by hopes that the European Central Bank will act to curb surging peripheral Eurozone borrowing costs and find ways to keep Greece afloat. The Aussie opens lower as demand from top consumers China is slowing down. The Asian stock markets declined. The European bourses are down, while the US stock markets are mixed in pre-open trading. Gold, oil and silver are little changed.
The short-term outlook for most 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
- No data
Today's economic calendar
US: Existing home sales for July
Canada: Retail sales for June
US: FOMC Minutes
EUR – September
Luca Model: Long since August 3
The September euro opens on a firm note after surging to a 1 ½-month high on Tuesday. The euro is trading above the 21-day exponential moving average. It peaked at a one-month high on August 6. 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.
Initial resistance is at 1.2510. Further resistance is at 1.2600.
The 55-day exponential moving average supports at 1.2431 and the 21-day exponential moving average at 1.2350. Further support is at 1.2245.
INDICATORS
Fast stochastics: Bullish
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 is quiet after recovering from Monday’s five-week low. It had fallen for most of last week. The break below the resistance line rising since March suggests further weakness.
The short-term outlook is sideways. The medium-term outlook is sideways and my model is short.
Immediate resistance is at 1.2640. The 21-day exponential moving average caps at 1.2681.
Monday’s low is 1.2556. The next support is at 1.2515. A pivot low is at 1.2416.
INDICATORS
Fast stochastics: Sideways
MACD: Slightly bearish
Ichimoku: Slightly bearish
OUTLOOK
NEAR-TERM: Sideways
MEDIUM-TERM: Slightly bearish
LONG-TERM: Sideways
GBP – September
Luca Model: Long since July 19
The September pound opens off a three-month high after closing above the 200-day exponential moving average on Tuesday. The pound broke the top of a symmetrical triangle. The pound had formed a medium-term peak at an eight-month high on April 30 and a bottom 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 resistance is at 1.5840. Further resistance is at 1.5890.
The 200-day exponential moving average supports at 1.5740. The 21-day exponential moving average supports at 1.5677.
INDICATORS
Fast stochastics: Bullish
MACD: Slightly bullish
Ichimoku: Slightly bullish
OUTLOOK
NEAR-TERM: Sideways
MEDIUM-TERM: Sideways
LONG-TERM: Sideways
CHF – September
Luca Model: Long since August 3
The September Swiss franc remains firm after climbing up to a 1 ½-month high and ending above the 55-day exponential moving average on Tuesday. It had marked a one-month high on August 6. The franc bottomed at a 19-month low on July 24.
The short-term outlook is sideways. The medium-term outlook is sideways and my model is long.
Initial resistance is at 1.0445. Further resistance is at 1.0490.
The 21-day exponentially smoothed moving average supports at 1.0286. The next floor is 1.0210.
INDICATORS
Fast stochastics: Bullish
MACD: Slightly bullish
Ichimoku: Slightly bullish
OUTLOOK
NEAR-TERM: Sideways
MEDIUM-TERM: Bearish
LONG-TERM: Bearish
CAD – September
Luca Model: Long since June 29
The September Canadian dollar opens at a one-week low after falling from a four-month high on Tuesday. It’s been trading in a channel rising since late July. The loonie had peaked on April 27 and bottomed at a 5 1/2-month low on June 1. It should make a mild correction through the end of the week before the next move higher.
The short-term outlook is sideways to slightly bearish. The medium-term outlook is bullish and my model is long.
Initial support is at 1.0060. Further support is at 1.0010.
Immediate resistance is at 1.0105. A pivot high is at 1.0168. Distant resistance is at 1.0275.
INDICATORS
Fast stochastics: Bearish
MACD: Bearish
Ichimoku: Bullish
OUTLOOK
NEAR-TERM: Sideways to slightly bearish
MEDIUM-TERM: Bullish
LONG-TERM: Sideways
AUD – September
Luca Model: Long since June 29
The September Australian dollar opens lower after advancing for two days and still holding in an inside range. It is trading around the 21-day exponential moving average. The Aussie, which has been advancing since June 4, peaked at a new high for the uptrend on Thursday.
The short-term outlook is sideways to slightly bearish. The medium-term outlook is bullish and my model is long.
Initial support is at 1.0350. Further support is at 1.0295.
Immediate resistance is at 1.0495. The top of the uptrend is 1.0578.
INDICATORS
Fast stochastics: Bearish
MACD: Slightly bearish
Ichimoku: Sideways
OUTLOOK
NEAR-TERM: Sideways to slightly bearish
MEDIUM-TERM: Bullish
LONG-TERM: Sideways
