The appetite for risk declined ahead of the US open on profit taking following weak economic reports and diminishing hopes about easing in the Eurozone and the US. The European and commodity currencies open lower and the Aussie is accelerating losses. The Asian indexes fell. The European bourses are down and the US stock markets are lower in pre-open trading. Gold, oil and silver are lower as well.
The short-term outlook for the European and commodity currencies is sideways to slightly bearish. The medium-term outlook for most of the foreign currencies is slightly bullish. The LGR short-term model is long on most foreign currencies. Good luck!
Overnight
Australia: The GDP rose 0.6% in the second quarter following the upwardly revised gain of 1.4% in the first quarter.
Australia: The AiG Performance of Services Index fell to 42.4 in August from 46.5 in July.
China: HSBC China Services PMI for August
Eurozone: The final Markit PMI composite fell to 46.3 in August from 46.5 in July. The final services PMI fell to 47.2 from 47.5 seen in the preliminary estimates and 47.9 in July.
Eurozone: Retail sales declined 0.2% in July following a 0.1% increase in June.
Switzerland: Consumer Price Index remained unchanged in August.
UK: The PMI for the service sector rose to 53.7 in August from 51 in July.
UK: A British Retail Consortium report showed that shop price inflation rose to 1.1% in August from 1% in July.
Today's economic calendar
US: Nonfarm productivity for the second quarter
Canada: The BoC will leave interest rates at 1%
EUR – December
Luca Model: Long since August 3
The December euro opens below the 100-day exponential moving average after peaking at a near two-month high on Friday. The euro had bottomed an over two-year low in late July and remains in a rising channel.
The short-term outlook is sideways to slightly bearish. The medium-term outlook is slightly bullish and my model is long.
Immediate support is at 1.2525. The 21-day exponential moving average supports at 1.2480.
The 100-day exponential moving average resists at 1.2604. Further resistance is at 1.2690.
INDICATORS
Fast stochastics: Slightly bullish
MACD: Slightly bullish
Ichimoku: Slightly bullish
OUTLOOK
NEAR-TERM: Sideways
MEDIUM-TERM: Slightly bullish
LONG-TERM: Bearish
JPY – December
Luca Model: Long since August 22
The December Japanese yen opens little changed after edging lower on Tuesday and rallying on Friday. It remains supported by the 21-day exponential moving average on a closing basis. The yen remains in an inside range. It had bottomed at a five-week low on August 17. The yen is trading in a symmetrical triangle.
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 1.2729. A pivot low is at 1.2565.
Immediate resistance is at 1.2800. The next resistance is at 1.2854.
INDICATORS
Fast stochastics: Sideways
MACD: Bullish
Ichimoku: Slightly bullish
OUTLOOK
NEAR-TERM: Sideways
MEDIUM-TERM: Sideways
LONG-TERM: Sideways
GBP – December
Luca Model: Long since July 19
The December pound opens marginally lower after surging on Friday. It peaked at a three-month high on August 23. 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 to slightly bearish. The medium-term outlook is slightly bullish and my model is long.
The 21-day exponential moving average supports at 1.5771. Distant support is at 1.5650.
A medium-term top is at 1.5907. Further resistance is at 1.5970.
INDICATORS
Fast stochastics: Sideways
MACD: Slightly bullish
Ichimoku: Slightly bullish
OUTLOOK
NEAR-TERM: Sideways to slightly bearish
MEDIUM-TERM: Slightly bullish
LONG-TERM: Sideways
CHF – December
Luca Model: Long since August 3
The December Swiss franc opens below the 100-day exponential moving average after peaking near a two-month high on Friday. The franc bottomed at a 19-month low on July 24 and has been trading a rising channel since then.
The short-term outlook is sideways to slightly bearish. The medium-term outlook is slightly bullish and my model is long.
The 21-day exponential moving average supports at 1.0403. Further support is at 1.0315.
Initial resistance is at 1.0485. Further resistance is at 1.0546.
INDICATORS
Fast stochastics: Bearish
MACD: Slightly bullish
Ichimoku: Slightly bullish
OUTLOOK
NEAR-TERM: Sideways to slightly bearish
MEDIUM-TERM: Slightly bullish
LONG-TERM: Bearish
CAD – December
Luca Model: Long since June 29
The December Canadian dollar is under mild pressure after recent gains. The 21-day exponential moving average supports the upmove. The Canadian dollar has been trading in a channel rising since late July. It 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.
The 21-day exponential moving average supports at 1.0054. The next floor is at 1.0010.
A pivot high is at 1.0136. Further resistance is at 1.0205.
INDICATORS
Fast stochastics: Bullish
MACD: Slightly bearish
Ichimoku: Bullish
OUTLOOK
NEAR-TERM: Sideways
MEDIUM-TERM: Bullish
LONG-TERM: Sideways
AUD – December
Luca Model: Short since August 27
The December Australian dollar is accelerating losses and fell to a six-week low. It is testing the support of the 200-day exponential moving average. The Aussie is trading below the 21-day exponential moving average and challenging the 100-day exponential moving average. It’s been trading a short-term channel declining since August 9. The Aussie, which has been advancing since June 4, peaked at a new high for the uptrend on August 9. The short-term outlook is sideways to slightly bearish. The medium-term outlook is bullish but my model is short.
The 200-day exponential moving average supports at 1.0077. Further support is at .9980.
The 55-day exponentially smoothed moving average caps at 1.0210 and the 21-day exponential moving average resists at 1.0270.
INDICATORS
Fast stochastics: Bearish
MACD: Bearish
Ichimoku: Slightly bearish
OUTLOOK
NEAR-TERM: Sideways to slightly bearish
MEDIUM-TERM: Sideways
LONG-TERM: Sideways
