The appetite for risk is cautiously and selectively higher ahead of the US open after imploding for two the past three days amid lackluster corporate earnings. The foreign currencies open divergently after falling since Thursday, as the help from an improvement in the Chinese PMI was countered by a weak Eurozone PMI and a soft German Ifo report. The Asian stock markets ended mixed. The European bourses are mixed, while the US stock markets are slightly higher in pre-open trading. The S&P500 seems to have confirmed a triple top formation on Tuesday. Gold, oil and silver are slightly higher.
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
Eurozone: The PMI composite output index fell to 45.8 in October from 46.1 in September. The manufacturing PMI dropped to 45.3 from 46.1 while the services PMI rose to 46.2 from 46.1.
Germany: The IFO business climate index fell to 100 in October from 101.4 September. The index for current situation fell to 107.3 from 110.3. The expectations index was unchanged at 93.2.
Today's economic calendar
US: New home sales for September
US: The Fed will leave interest rates unchanged
EUR – December
Luca Model: Short since October 19
The December euro opens at a nine-day low and below the 21-day exponential moving average. 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 to slightly bearish. The medium-term outlook is bullish but my model is short.
The 200-day exponential moving average supports at 1.2910. Further support is at 1.2844.
Immediate resistance is at 1.3005. Further resistance is at 1.3050 and 1.3145.
INDICATORS
Fast stochastics: Bearish
MACD: Sideways
Ichimoku: Sideways
OUTLOOK
NEAR-TERM: Sideways to slightly bearish
MEDIUM-TERM: Bullish
LONG-TERM: Sideways
JPY – December
Luca Model: Short since September 28
The oversold December Japanese yen opens marginally higher in the US 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.
Initial resistance is at 1.2565. The 21-day exponential moving average resists at a distant 1.2684.
A pivot low is at 1.2438. Further support is at 1.2300.
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 opens slightly higher in the US 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 55-day exponential moving average resists at 1.5983 and the 21-day exponential moving average caps at 1.6051. Distant resistance is at 1.6175.
The 100-day exponential moving average supports at 1.5905. Further support is at 1.5865.
INDICATORS
Fast stochastics: Sideways
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 opens at a nine-day low in the US. It is trading below 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.
The short-term outlook is sideways to slightly bearish. The medium-term outlook is bullish but my model is short.
Initial support is at 1.0680. Further support is at 1.0633.
Immediate resistance is at 1.0745. The next cap is 1.0805. The peak of the uptrend is 1.0861.
INDICATORS
Fast stochastics: Bearish
MACD: Slightly bearish
Ichimoku: Slightly bullish
OUTLOOK
NEAR-TERM: Sideways to slightly bearish
MEDIUM-TERM: Bullish
LONG-TERM: Sideways
CAD – December
Luca Model: Short since September 17
The December Canadian dollar opens slightly higher 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: Sideways
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 opens higher in an inside range 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 marked a 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
