The foreign currencies are consolidating after falling since Thursday with help from an improvement in the Chinese PMI. The appetite for risk remains limited after imploding for two of the past three days amid lackluster corporate earnings. The Asian stock markets declined much less that the US indexes.

The short-term outlook for the European and commodity currencies is sideways. The medium-term outlook for most of the foreign currencies is still slightly bullish. The LGR short-term model is short on yen, sterling and Canadian dollar, and long euro, franc and Australian dollar.

Good luck!

Overnight

  • Australia: The Consumer Price Index rose 2.0% on year in the third quarter following the 1.2% gain in the second quarter. 
  • China: The HSBC manufacturing PMI rose to 49.1 in October from 47.9 in September

 

Today's economic calendar

  • Eurozone: Markit services PMI for October
  • Germany: IFO - business climate / - current assessment  / expectations for October 

 

EUR – December

Luca Model: Short since October 19        
 
The December euro is consolidating above the 21-day exponential moving average after falling to a one-week low on Tuesday. The euro peaked near a four-month high on September 17 and bottomed at an over two-year low in July.
The short-term outlook is sideways. The medium-term outlook is bullish but my model is short.
Immediate resistance is at 1.3050. Further resistance is at 1.3145. 
Initial support is at 1.2955. The 200-day exponential moving average supports at 1.2911. Further support is at 1.2844.


INDICATORS

Fast stochastics: Bearish
MACD: Sideways
Ichimoku: Sideways


OUTLOOK

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

   

JPY – December

Luca Model: Short since September 28             
 
The oversold December Japanese yen remains on the ropes after falling for nine days and marking a 3 1/2-month low on Tuesday. It is trading well below the 200-day exponential moving average. The yen had peaked at a seven-month high on September 13. 
The short-term outlook is sideways. The medium-term outlook is sideways my model is short.
A pivot low is at 1.2438. Further support is at 1.2300.
Initial resistance is at 1.2565. The 21-day exponential moving average resists at a distant 1.2683.   

INDICATORS

Fast stochastics: Bearish
MACD: Bearish
Ichimoku: Bearish


OUTLOOK

NEAR-TERM: Sideways  
MEDIUM-TERM: Sideways  
LONG-TERM: Sideways  

  

GBP – December

Luca Model: Short since September 26                  

The December pound remains under pressure after falling for four days and hitting a 1 ½-month low on Tuesday. It remains below the 21-day exponential moving average. 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 100-day exponential moving average supports at 1.5905. Further support is at 1.5865.
The 55-day exponential moving average resists at 1.5983 and the 21-day exponential moving average caps at 1.6049. Distant resistance is at 1.6175. 

INDICATORS

Fast stochastics: Slightly bearish
MACD: Slightly bearish
Ichimoku: Slightly bearish


OUTLOOK

NEAR-TERM: Sideways  
MEDIUM-TERM: Sideways
LONG-TERM: Sideways

 

CHF – December

Luca Model: Short since October 19  

The December Swiss franc is struggling higher after dropping to an eight-day low on Tuesday. It is hovering above the 21-day exponential moving average. The franc peaked at a high for the uptrend on October 17 and bottomed at a 19-month low on July 24. It is trading well above the 200-day exponential moving average. 
The short-term outlook is sideways. The medium-term outlook is bullish but my model is short.
Immediate resistance is at 1.0805. The peak of the uptrend is 1.0861.
Initial support is at 1.0680. Further support is at 1.0633.

INDICATORS

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


OUTLOOK

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

  

CAD – December

Luca Model: Short since September 17

The December Canadian dollar is consolidating after dropping to a 2 1/2-month low on Tuesday. 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.
Immediate resistance is at 1.0105. The 21-day exponential moving average caps at 1.0139. Distant resistance is at 1.0240. 
Tuesday’s low is 1.0012. The 200-day exponential moving average supports at 0.9990. Further support is at .9900.


INDICATORS

Fast stochastics: Bearish
MACD: Slightly bearish
Ichimoku: Sideways


OUTLOOK

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

 

AUD – December

Luca Model: Long since October 16

The December Australian dollar is edging higher after sliding to an 11-day low on Tuesday. The Aussie is trading above the 21-day exponential moving average. It bottomed at a one-month low on October 8 and 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 and my model went long.
Immediate resistance is at 1.0295. The next caps are 1.0363.   
Initial support is at 1.0190. Further support is at 1.0130 and 1.0040. 

INDICATORS

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


OUTLOOK

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