The appetite for risk remained firm in the Far East on the last day of the quarter after Spain announced a detailed timetable for economic reforms and a tough 2013 budget based primarily on spending cuts. This Spanish budget is overly optimistic, but Spain succeeded in pre-empting tough terms for any international bailout. The European and commodity currencies remain firm after all foreign currencies rallied and they should remain strong today. The Asian stock indexes rallied in line with the US markets.

The short-term outlook for the foreign currencies is slightly bullish. The medium-term outlook for most of the foreign currencies is slightly bullish. The LGR short-term model is long on all foreign currencies.

Good luck!

 

Overnight

  • UK: Gfk consumer confidence came in at -28 in September from -29 in August. 
  • Japan: The Nomura/ JMMA manufacturing Purchasing Manager Index rose to 48.0 in September from 47.7 in August. 
  • Japan: The National Consumer Price Index National was unchanged at -0.4% in August on a yearly basis. The core CPI came in at -0.5% in August from -0.6% in July. The Tokyo CPI was unchanged at -0.7% in September and the Tokyo core CPI came in at -1.1% from -0.8%. 
  • Japan: The unemployment rate edged lower to 4.2% in August from 4.3% in July. 
  • Japan: Overall household spending rose to 1.8% in August from 1.7% in July. 
  • Japan: Industrial production fell 1.3% in August after declining 0.1% in July.
  • Japan: Retail sales rose 1.5% in August after falling 1.5% in July.
  • Japan: Housing starts for August 
  • Australia: The private sector credit edged up 0.2% in August, the same as in July. 
  • China: HSBC manufacturing PMI for September 

   

Today's economic calendar

  • France: Gross Domestic Product for the second quarter 
  • France: Consumer spending  for July 
  • France: Producer Prices for July 
  • Italy: Producer Price Index for September 
  • Italy: Consumer Price Index  for September 
  • Switzerland: KOF leading indicator for September 
  • UK: Index of Services (3M/3M) for July 

      
 
EUR – December

Luca Model: Long since August 3        
 
The December euro remains firm after reversing on Thursday from a two-week low following Spain’s budget for 2013. The euro had peaked near a four-month high on September 17. It is trading back above both the 200-day exponential moving average and 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 bullish. The medium-term outlook is bullish and my model is long.
Initial resistance is at 1.2965. The next cap is 1.3060. A pivot high is at 1.3183.
The 21-day exponential moving average supports at 1.2859. Further support is at 1.2770.


INDICATORS

Fast stochastics: Sideways
MACD: Slightly bearish
Ichimoku: Sideways


OUTLOOK

NEAR-TERM: Slightly bullish
MEDIUM-TERM: Bullish
LONG-TERM: Sideways

 

JPY – December

Luca Model: Long since August 22             
 
The December Japanese yen is strong as it is advancing for an eighth day and reaching a two-week high in Asia. It is trading 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 1.2810. 

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 is consolidating after rallying on Thursday and falling to a 12-day low on Wednesday. It marked a new high for the uptrend on September. The pound had bottomed at a 4 1/2-month low on June 1.
The short-term outlook is slightly bullish. The medium-term outlook is bullish and my model is long.
Initial resistance is at 1.6263. The top of the uptrend is 1.6304. 
Immediate support is at 1.6160. The 21-day exponential moving average supports at 1.6104. 

INDICATORS

Fast stochastics: Sideways
MACD: Slightly bearish
Ichimoku: Sideways


OUTLOOK

NEAR-TERM: Slightly bullish
MEDIUM-TERM: Bullish
LONG-TERM: Sideways

  

CHF – December

Luca Model: Long since August 3  

The overbought December Swiss franc is marking time after ending just above the 21-day exponential moving average on Thursday and falling to a 13-day low on Wednesday. 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 bullish. The medium-term outlook is bullish and my model is long.
The 200-day exponential moving average caps at 1.0753. A pivot high is at 1.0838.  
The 21-day exponential moving average supports at 1.0644. Further support us at 1.0590 and 1.0530.

INDICATORS

Fast stochastics: Bearish
MACD: Slightly bearish
Ichimoku: Sideways


OUTLOOK

NEAR-TERM: Slightly bullish
MEDIUM-TERM: Bullish 
LONG-TERM: Sideways

 

CAD – December

Luca Model: Long since June 29

The overbought December Canadian dollar is consolidating around 21-day exponential moving average after rallying on Thursday and falling to a near three-week low on Wednesday. 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 bullish. The medium-term outlook is bullish and my model is long.
Immediate support is at 1.0240. A pivot high is at 1.0359.  
Initial support is at 1.0120. Further support is at 1.0060.


INDICATORS

Fast stochastics: Slightly bullish
MACD: Bearish
Ichimoku: Sideways


OUTLOOK

NEAR-TERM: Slightly bullish
MEDIUM-TERM: Bullish  
LONG-TERM: Sideways

 

AUD – December

Luca Model: Long since September 7

The December Australian dollar is consolidating after rallying on Thursday after falling to an over two-week low on Wednesday. It marked a new high for the uptrend on September 14. 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 slightly bullish. The medium-term outlook is bullish and my model is long.
Initial resistance is at 1.0395. Further resistance is at 1.0440. A pivot high is at 1.0537.
Immediate support is at 1.0305. Further support is at 1.0255 and 1.0195.

INDICATORS

Fast stochastics: Slightly bullish 
MACD: Slightly bearish
Ichimoku: Sideways


OUTLOOK

NEAR-TERM: Slightly bullish
MEDIUM-TERM: Bullish   
LONG-TERM: Sideways