The financial markets remain risk averse ahead of the US open amid concern over the Eurozone peripherals’ precarious debt situation. Germany, the Netherlands and Finland issued a joint declaration on Tuesday which seems to weaken the agreement for the direct recapitalization of problem banks reached at the last European summit in June. The European and commodity currencies remain soft and the yen firm. The Asian stock indexes sank. The European bourses are down, while the US stock markets are slightly lower in pre-open trading. Gold, oil and silver are down as well.
The short-term outlook for the European and commodity currencies is slightly bearish. The medium-term outlook for most of the foreign currencies is slightly bullish. The LGR short-term model is long on all foreign currencies.
Overnight
Eurozone: The leading index rose 0.6% month-on-month in August following no change in July.
France: Consumer confidence eased marginally to 85 in September from 86 in August
Italy: Retail sales fell 0.2% in July after rising 0.4% in June.
Today's economic calendar
- US: New home sales for August
EUR – December
Luca Model: Long since August 3
The December euro opens at a 13-day low. The euro had peaked near a four-month high on September 17. It fell below the 200-day exponential moving average but still trading above the 21-day exponential moving average. The euro had bottomed an over two-year low in late July and remains in a rising channel.
The short-term outlook is slightly bearish. The medium-term outlook is bullish and my model is long.
The 21-day exponential moving average supports at 1.2846. Further support is at 1.2770 and 1.2680.
Initial resistance is at 1.2925. The next caps are 1.2970 and 1.3060. A pivot high is at 1.3183.
INDICATORS
Fast stochastics: Bearish
MACD: Slightly bearish
Ichimoku: Sideways
OUTLOOK
NEAR-TERM: Slightly bearish
MEDIUM-TERM: Bullish
LONG-TERM: Sideways
JPY – December
Luca Model: Long since August 22
The December Japanese yen is advancing for a sixth day and opens at a 12-day high. It is hovering well above the 21-day exponential moving average and is overbought. The yen had peaked at a seven-month high on September 13.
The short-term outlook is slightly bullish. The medium-term outlook is bullish and my model is long.
Immediate resistance is at 1.2915. A pivot high is at 1.2977.
Initial support is at 1.2850. The 21-day exponential moving average supports at 1.2794.
INDICATORS
Fast stochastics: Bullish
MACD: Slightly bullish
Ichimoku: Slightly bullish
OUTLOOK
NEAR-TERM: Slightly bullish
MEDIUM-TERM: Bullish
LONG-TERM: Sideways
GBP – December
Luca Model: Long since July 19
The overbought December pound opens off a 12-day low. It’s been quiet otherwise after spiking to a new high for the uptrend on Friday. The pound had bottomed at a 4 1/2-month low on June 1.
The short-term outlook is slightly bearish. The medium-term outlook is bullish and my model is long.
Immediate support is at 1.6120. The 21-day exponential moving average supports at 1.6080.
Initial resistance is at 1.6245. The top of the uptrend is 1.6304.
INDICATORS
Fast stochastics: Bearish
MACD: Slightly bearish
Ichimoku: Sideways
OUTLOOK
NEAR-TERM: Slightly bearish
MEDIUM-TERM: Bullish
LONG-TERM: Sideways
CHF – December
Luca Model: Long since August 3
The overbought December Swiss franc opens at a 13-day low. It peaked at a new high for the uptrend on September 14. The franc is trading below its 200-day exponential moving average. It had bottomed at a 19-month low on July 24. The franc has been trading a rising channel since then.
The short-term outlook is slightly bearish. The medium-term outlook is bullish and my model is long.
The 21-day exponential moving average supports at 1.0636. Further support us at 1.0590 and 1.0530.
Immediate resistance is at 1.0690. The 200-day exponential moving average caps at 1.0754. A pivot high is at 1.0838.
INDICATORS
Fast stochastics: Bearish
MACD: Slightly bearish
Ichimoku: Sideways
OUTLOOK
NEAR-TERM: Slightly bearish
MEDIUM-TERM: Bullish
LONG-TERM: Sideways
CAD – December
Luca Model: Long since June 29
The overbought December Canadian dollar opens of a near three-week low and around the 21-day exponential moving average. It had reached a new high for the uptrend on September 14. The Canadian dollar has been trading in a channel rising since late July. It bottomed at a 5 1/2-month low on June 1.
The short-term outlook is slightly bearish. The medium-term outlook is bullish and my model is long.
Initial support is at 1.0135. Further support is at 1.0060.
Immediate resistance is at 1.0240. A pivot high is at 1.0359.
INDICATORS
Fast stochastics: Bearish
MACD: Bearish
Ichimoku: Sideways
OUTLOOK
NEAR-TERM: Slightly bearish
MEDIUM-TERM: Bullish
LONG-TERM: Sideways
AUD – December
Luca Model: Long since September 7
The December Australian dollar opens at an over two-week low and below the 21-day exponential moving average. It marked a new high for the uptrend on September 14, but the oscillators correctly showed bearish divergence. 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. The medium-term outlook is bullish and my model is long.
The 55-day exponential moving average supports at 1.0270. Further support is at 1.0195.
The 21-day exponential moving average caps at 1.0334. Further resistance is at 1.0380 and 1.0440. A pivot high is at 1.0537.
INDICATORS
Fast stochastics: Bearish
MACD: Slightly bearish
Ichimoku: Sideways
OUTLOOK
NEAR-TERM: Slightly bearish
MEDIUM-TERM: Bullish
LONG-TERM: Sideways
