The appetite for risk is on the rise ahead of the US market after contracting on Friday. The European and commodity currencies reversed early losses and open up at the start of the fourth quarter as the Eurozone manufacturing data was not as bad as expected. Still, uncertainty over Spain weighed.

The short-term outlook for the European and commodity currencies turned sideways to slightly bullish. The medium-term outlook for most of the foreign currencies is slightly bullish. The LGR short-term model is short on all foreign currencies.

Good luck!


Overnight

  • China: The HSBC manufacturing PMI edged up to 47.9 in September from 47.8 in August.

  • China: The NBS manufacturing PMI rose to 49.8 in September from 49.2 in August

  • Australia: The AIG manufacturing PMI fell to 44.1 in September from 45.3 in August.

  • Japan: The Tankan Large All Industry fell to -3 in the third quarter following -1 in the second quarter.

  • UK: The Halifax house prices slipped 0.1% in September, the same as in the previous two months.

  • Eurozone: The final manufacturing PMI came in at a six-month high of 46.1 in September, slightly higher than 46 recorded in the preliminary estimate.

  • Eurozone: Unemployment rate was unchanged at -11.4% in August.

  • Italy: The unemployment rate remained unchanged 10.7% in August.

  • Switzerland: Retail sales rose 0.4% in August compared to a 0.6% fall in July.

  • Switzerland: The SVME - PMI fell to 43.6 in September from 46.7 in August.

  • UK: The Markit/CIPS PMI fell to 48.4 from 49.6 in August.

  • UK: The mortgage approvals increased to 47,665 in August from 47,556 in July.

  • UK: Consumer credit slipped -£0.10 billion in September, up from -£0.20 billion in August.


Today's economic calendar

  • US: Markit manufacturing PMI for September

  • US: Construction spending for August

  • US: ISM manufacturing for September

  • Canada: Industrial product price/raw material price index for August


EUR – December

Luca Model: Short since September 20

The December euro reversed from a near three-week low and opens above the 21-day exponential moving average in the US. The euro had peaked near a four-month high on September 17. It is trading back 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 sideways to slightly bullish. The medium-term outlook is bullish but my model is short.

The 21-day exponentially smoothed moving average resists at 1.2858. The next caps are1.2970 and 1.3025.

Immediate support is at 1.2775. Further support is at 1.2700.

INDICATORS

Fast stochastics: Bullish

MACD: Slightly bearish

Ichimoku: Sideways

OUTLOOK

NEAR-TERM: Sideways with downside risk into Wednesday

MEDIUM-TERM: Bullish

LONG-TERM: Sideways


JPY – December

Luca Model: Short since September 28

The December Japanese yen opens flat just above the 21-day exponential moving average after collapsing from a two-week high to a four-day low on Friday. It is no longer overbought. The yen had peaked at a seven-month high on September 13.

The short-term outlook is sideways. The medium-term outlook is bullish but my model went short.

The 21-day exponential moving average supports at 1.2807. Further support is at 1.2725.

Friday’s high is 1.2922. A pivot high is at 1.2977.

INDICATORS

Fast stochastics: Slightly bearish

MACD: Slightly bullish

Ichimoku: Slightly bullish

OUTLOOK

NEAR-TERM: Sideways

MEDIUM-TERM: Bullish

LONG-TERM: Sideways


GBP – December

Luca Model: Short since September 26

The December pound opens off a 2 ½-week low and just above the 21-day exponentially smoothed moving average after diving from a one-week high on Friday. It marked a new high for the uptrend on September and bottomed at a 4 1/2-month low on June 1. The pound is not overbought any longer.

The short-term outlook is sideways. The medium-term outlook is bullish but my model went short.

Initial resistance is at 1.6160. Friday’s high is 1.6269. The top of the uptrend is 1.6304.

The 21-day exponential moving average supports at 1.6101. Further support is at 1.6025.

INDICATORS

Fast stochastics: Bearish (oversold)

MACD: Slightly bearish

Ichimoku: Sideways

OUTLOOK

NEAR-TERM: Sideways

MEDIUM-TERM: Bullish

LONG-TERM: Sideways


CHF – December

Luca Model: Short since September 20

The December Swiss franc reversed from a near three-week low and opens up in the US. The franc is trading back above its 21-day exponential moving average. It peaked at a new high for the uptrend on September 14 and bottomed at a 19-month low on July 24. The franc has been trading a rising channel since late July.

The short-term outlook is sideways to slightly bullish. The medium-term outlook is bullish but my model is short.

The 200-day exponential moving average caps at 1.0751. A pivot high is at 1.0838.

The 21-day exponentially smoothed moving average supports at 1.0645. Further support is at 1.0590, and 1.1500.

INDICATORS

Fast stochastics: Slightly bullish

MACD: Slightly bearish

Ichimoku: Sideways

OUTLOOK

NEAR-TERM: Sideways to slightly bullish

MEDIUM-TERM: Bullish

LONG-TERM: Sideways


CAD – December

Luca Model: Short since September 17

The overbought December Canadian dollar opens up just below the 21-day exponentially smoothed moving average, alternating direction for four days. 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 sideways to slightly bullish. The medium-term outlook is bullish but my model is short.

Immediate resistance is at 1.0205. A pivot high is at 1.0359.

Initial support is at 1.0123. Further support is at 1.0075 and .9990.

INDICATORS

Fast stochastics: Slightly bullish

MACD: Bearish

Ichimoku: Sideways

OUTLOOK

NEAR-TERM: Sideways to slightly bullish

MEDIUM-TERM: Bullish

LONG-TERM: Sideways


AUD – December

Luca Model: Short since September 28

The December Australian dollar opens off a near three-week low in the US. 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 sideways to slightly bullish. The medium-term outlook is bullish but my model went short.

The 21-day exponentially smoothed moving average caps at 1.0332. Further resistance is at 1.0430. A pivot high is at 1.0537.

Monday’s low is 1.0258. Further support is at 1.0195.

INDICATORS

Fast stochastics: Sideways

MACD: Slightly bearish

Ichimoku: Sideways

OUTLOOK

NEAR-TERM: Sideways to slightly bullish

MEDIUM-TERM: Bullish

LONG-TERM: Sideways