The appetite for risk is firm ahead of the US open, as the strong UK GDP report suggested economic stabilization in the G10 space. Well, this is a wide space and the Eurozone should actually see weakness in the fourth quarter. The European and commodity currencies open higher and the yen further down. The Asia/Pacific stock indexes advanced. The European bourses are up and the US stock markets are higher in pre-open trading. Gold, oil and silver are up as well.
The short-term outlook for the European and commodity currencies is slightly bullish. 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
Japan: An index measuring corporate service prices was down 0.5% on year in September after dipping 0.3% for the previous three months.
China: The leading economic index increased 0.3% in September following a 1.7% increase in August.
Italy: Retail sales were flat in August after slipping 0.2% in July.
UK: GDP grew by a more-than expected 1% in the third quarter following a 0.4% fall in the second quarter.
UK: The index of services expanded 1.7% in August y-o-y, following a 1.1% rise in July.
Today's economic calendar
US: Durable goods orders for September
US: Initial jobless claims
US: Pending home sales for August
EUR – December
Luca Model: Short since October 19
The December euro opens higher above the 21-day exponential moving average after ending off a nine-day low on Wednesday. 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 slightly bullish. The medium-term outlook is bullish but my model is short.
Immediate resistance is at 1.3050. Further resistance is at 1.3145.
The 21-day exponential moving average supports at 1.2977 and the 200-day exponential moving average supports at 1.2911. Distant support is at 1.2844.
INDICATORS
Fast stochastics: Sideways
MACD: Sideways
Ichimoku: Sideways
OUTLOOK
NEAR-TERM: Slightly bullish
MEDIUM-TERM: Bullish
LONG-TERM: Sideways
JPY – December
Luca Model: Short since September 28
The oversold December Japanese yen is extending losses and opens at a four-month low. It is trading well below the 21-day exponential moving average. The yen had peaked at a seven-month high on September 13.
The short-term outlook is slightly bearish. 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 1.2515. The next cap is 1.2565. The 21-day exponential moving average resists at a distant 1.2666.
INDICATORS
Fast stochastics: Bearish
MACD: Bearish
Ichimoku: Bearish
OUTLOOK
NEAR-TERM: Slightly bearish
MEDIUM-TERM: Sideways
LONG-TERM: Sideways
GBP – December
Luca Model: Short since September 26
The December pound opens at a one-week high in the US only two days after hitting a 1 ½-month low. It barged its way above the 21-day exponential moving average. The pound 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 slightly bullish. The medium-term outlook is sideways and my model is short.
Initial resistance is at 1.6175. Further resistance is at 1.6270.
The 21-day exponential moving average supports at 1.6063 and the 55-day exponential moving average supports at 1.5991.
INDICATORS
Fast stochastics: Bullish
MACD: Slightly bearish
Ichimoku: Slightly bearish
OUTLOOK
NEAR-TERM: Slightly bullish
MEDIUM-TERM: Sideways
LONG-TERM: Sideways
CHF – December
Luca Model: Short since October 19
The December Swiss franc opens higher above the 21-day exponential moving average after recovering from a nine-day low on Wednesday. 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 slightly bullish. The medium-term outlook is bullish but my model is short.
Immediate resistance is at 1.0775. The next cap is 1.0805. The peak of the uptrend is 1.0861.
Initial support is at 1.0689. Further support is at 1.0633.
INDICATORS
Fast stochastics: Slightly bearish
MACD: Slightly bearish
Ichimoku: Slightly bullish
OUTLOOK
NEAR-TERM: Slightly bullish
MEDIUM-TERM: Bullish
LONG-TERM: Sideways
CAD – December
Luca Model: Short since September 17
The December Canadian dollar opens slightly higher in an inside range after marking a 2 1/2-month low on Tuesday. It has been trading in a channel rising since late July. The Canadian dollar had marked a high for the uptrend on September 14 and bottomed at a 5 1/2-month low on June 1.
The short-term outlook is slightly bullish. The medium-term outlook is bullish but my model is short.
Immediate resistance is at 1.0100. The 21-day exponential moving average caps at 1.0131. Distant resistance is at 1.0240.
Tuesday’s low is 1.0012. The 200-day exponential moving average supports at 0.9991. Further support is at .9900.
INDICATORS
Fast stochastics: Slightly bullish
MACD: Slightly bearish
Ichimoku: Sideways
OUTLOOK
NEAR-TERM: Slightly bullish
MEDIUM-TERM: Bullish
LONG-TERM: Sideways
AUD – December
Luca Model: Long since October 16r
The December Australian dollar opens at a one-week high. The Aussie is trading above the 21-day exponential moving average. It has been advancing since June 4. The Aussie bottomed at a one-month low on October 8 and marked a high for the uptrend on September 14.
The short-term outlook is slightly bullish. The medium-term outlook is bullish and my model went long.
A short-term top is at 1.0363. Further resistance is at 1.0442.
The 21-day exponential moving average supports at 1.0261. The next support is at 1.0190.
INDICATORS
Fast stochastics: Slightly bullish
MACD: Slightly bullish
Ichimoku: Slightly bullish
OUTLOOK
NEAR-TERM: Slightly bullish
MEDIUM-TERM: Bullish
LONG-TERM: Sideways
