The foreign currencies open little changed in the Far East after another divergent closing on Friday; the European currencies ended higher and the yen and the commodity currencies lower. Outside the customary optimistic façade of politicians, a.k.a. some optimism that a firewall is in place to contain the euro’s turmoil, the European Union’s leaders will convene for an October 18-19 summit in Brussels to attempt alleviate the debt crisis in Spain and Greece.
The short-term outlook for the foreign currencies is sideways. 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
- US: Producer price index rose by 1.1% in September after jumping 1.7% in August. The core PPI was unchanged in September after rising 0.2% percent in August.
- US: The Reuters/Michigan consumer sentiment index surged to 83.1 in October from 78.3 in September.
Today's economic calendar
- China: The trade surplus expanded to 27.700 billion in September from 26.661 billion in August.
- China: Consumer Price Index for September
- UK: Rightmove house price index for October
- Australia: Home loans for August
- Australia: Investment lending for homes for August
- Japan: Industrial production / capacity utilization for August
EUR – December
Luca Model: Short since September 20
The December euro opens little changed after nailing a three-day high on Friday. It is trading above the 21-day exponential moving average. The euro had peaked near a four-month high on September 17. The euro had bottomed an over two-year low in late July and remains in a rising channel.
The short-term outlook is sideways. The medium-term outlook is bullish but my model is short.
Immediate resistance is at 1.3000. The next cap is at 1.3080.
The 21-day exponential moving average supports at 1.2916. Further support is at 1.2850. Distant support is at 1.2775.
INDICATORS
Fast stochastics: Bullish
MACD: Slightly bearish
Ichimoku: Sideways
OUTLOOK
NEAR-TERM: Sideways
MEDIUM-TERM: Bullish
LONG-TERM: Sideways
JPY – December
Luca Model: Short since September 28
The December Japanese yen remains under pressure around the 55-day exponential moving average after falling below the 21-day exponential moving average on Thursday. 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.
Immediate support is at 1.2730. Further support is at 1.2685 and 1.2625.
Initial resistance is at 1.2836. An intermediate top is at 1.2922.
INDICATORS
Fast stochastics: Sideways
MACD: Slightly bearish
Ichimoku: Sideways
OUTLOOK
NEAR-TERM: Sideways
MEDIUM-TERM: Bullish
LONG-TERM: Sideways
GBP – December
Luca Model: Short since September 26
The December pound opens around the 21-day exponential moving average after reaching a four-day 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 short-term outlook is sideways. The medium-term outlook is sideways and my model is short.
The 21-day exponential moving average caps at 1.6079. Further resistance is at 1.6120. An intermediate peak is at 1.6269.
Immediate support is at 1.6005. The 55-day exponential moving average supports at 1.5970. Distant support is at 1.5865.
INDICATORS
Fast stochastics: Slightly bullish
MACD: Slightly bearish
Ichimoku: Slightly bearish
OUTLOOK
NEAR-TERM: Sideways
MEDIUM-TERM: Sideways
LONG-TERM: Sideways
CHF – December
Luca Model: Short since September 20
The December Swiss franc opens little changed in the Far East after marking a four-day high on Friday. The rally was capped and tamed by the 200-day exponential moving average. The franc is trading 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. The medium-term outlook is bullish but my model is short.
Friday’s high is 1.0756. A pivot high is at 1.0838.
The 21-day exponential moving average supports at 1.0684. The next support is at 1.0633. Further support is at 1.0585 and 1.0500.
INDICATORS
Fast stochastics: Bullish
MACD: Slightly bearish
Ichimoku: Sideways
OUTLOOK
NEAR-TERM: Sideways
MEDIUM-TERM: Bullish
LONG-TERM: Sideways
CAD – December
Luca Model: Short since September 17
The December Canadian dollar opens little changed after marking time on Friday. It is trading just above the 21-day exponential moving average. It had marked a 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. The medium-term outlook is bullish but my model is short.
Initial resistance is at 1.0256. A pivot high is at 1.0359.
Immediate support is at 1.0155. Further support is at 1.0100 and .9990.
INDICATORS
Fast stochastics: Sideways
MACD: Sideways
Ichimoku: Sideways
OUTLOOK
NEAR-TERM: Sideways
MEDIUM-TERM: Bullish
LONG-TERM: Sideways
AUD – December
Luca Model: Short since September 28
The oversold December Australian dollar opens little changed after falling on Friday and advancing in the previous four days. The decline on Friday was in an inside range, so more information is needed. It bottomed at a one-month low early on Monday after sliding for most of last week. The Aussie is trading below the trend line rising since July 12 and the 200-day exponential moving average. It had peaked at a new high for the uptrend on September 14. The Aussie has been advancing since June 4.
The short-term outlook is sideways. The medium-term outlook is bullish but my model went short.
Immediate support is at 1.0155. A pivot low is at 1.0077.
The 21-day exponential moving average caps at 1.0233. Further resistance is at 1.0365.
INDICATORS
Fast stochastics: Slightly bullish
MACD: Slightly bearish
Ichimoku: Slightly bearish
OUTLOOK
NEAR-TERM: Sideways
MEDIUM-TERM: Bullish
LONG-TERM: Sideways
