The appetite for risk improved in thinning trading conditions on Thursday amid ongoing, rather than deadlocked, “fiscal cliff” talks after declining late Wednesday. The US political saga continues though.
All foreign currencies but the Aussie and yen advanced after the European currencies surrendered gains and the commodity currencies fell further on Wednesday. Even the yen closed above its 20-month low. The US stock markets gained. Gold, oil and silver fell.
The short-term outlook for most major currencies is sideways. The medium-term outlook for most of the foreign currencies is sideways. The LGR short-term model is long on all European and commodity currencies and short yen. Good luck!
Overnight
- US: The final estimate showed that GDP increased at an annual rate of 3.1% in the third quarter compared to the previous estimate of + 2.7%.
- US: Initial jobless claims increased of 17,000 to 361,000 from the previous week's revised figure of 344,000 (343,000 originally reported).
- US: Personal consumption expenditures prices rose 1.6% in the third quarter, the same as in the second quarter.
- US: Existing home sales rose 5.9% to an annual rate of 5.04 million in November from a downwardly revised 4.76 million in October.
- US: The Philly Fed’s diffusion index of current activity climbed to +8.1 in December from -10.7 in November.
- US: The leading economic indicator fell 0.2% in November after rising 0.3% in October.
- Canada: Retail sales rose 0.7% in October after inching up 0.1% in September.
Today's economic calendar
- UK: Gfk consumer confidence for December
- Japan: The Bank of Japan monthly economic survey
EUR – March
The LGR Model: Long since December 11
The March euro reversed early losses and ended slightly higher on Thursday after falling off an eight-month high on Wednesday. It is still trading well above the 21-day exponential moving average and is overbought. The euro had bottomed at an over two-year low in July.
The short-term outlook is sideways. The medium-term outlook is slightly bullish and my model is long.
Wednesday’s high is 1.3321. Further resistance is at 1.3390.
Immediate support is at 1.3205. The next floor is 1.3110. The 21-day exponential moving average supports at 1.3071.
INDICATORS
Fast stochastics: Sideways
MACD: Slightly bullish
Ichimoku: Slightly bullish
OUTLOOK
NEAR-TERM: Sideways
MEDIUM-TERM: Slightly bullish
LONG-TERM: Sideways
JPY – March
The LGR Model: Short since September 28
The oversold March Japanese yen closed lower on Thursday after closing off a new 20-month low on Wednesday. The yen is trading below the neckline of a long-term head–and-shoulders pattern. It also trades 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 sideways. The medium-term outlook is bearish and the model is short.
Immediate support is 1.1810. Further support is at 1.1745.
Initial resistance is at 1.1940. Further resistance is at 1.2010. The 21-day exponential moving average caps at 1.2092.
INDICATORS
Fast stochastics: Bearish
MACD: Bearish
Ichimoku: Bearish
OUTLOOK
NEAR-TERM: Sideways
MEDIUM-TERM: Bearish
LONG-TERM: Bearish
GBP – March
The LGR Model: Long since December 10
The overbought March pound ended up on Thursday after falling from a 16-month high on Wednesday. It is trading well above the 21-day exponential moving average. The pound had bottomed at a 4 1/2-month low on June 1.
The short-term outlook is sideways. The medium-term outlook is slightly bullish and my model is long.
Wednesday’s high is 1.6304. Further resistance is at 1.6385.
Initial support is at 1.6200. The next floor is 1.6155. The 21-day exponentially smoothed moving average supports at 1.6116.
INDICATORS
Fast stochastics: Sideways
MACD: Slightly bullish
Ichimoku: Slightly bullish
OUTLOOK
NEAR-TERM: Sideways
MEDIUM-TERM: Slightly bullish
LONG-TERM: Sideways
CHF – March
The LGR Model: Long since December 12
The March Swiss franc closed off a seven-month high on Thursday. It is trading well above the 21-day exponential moving average and is overbought. The franc marked a 19-month low on July 24.
The short-term outlook is sideways. The medium-term outlook is slightly bullish and the LGR model is long.
Thursday high is 1.1026. Further resistance is at 1.1120.
Initial support is at 1.0925. The 21-day exponential moving average supports at 1.0830.
INDICATORS
Fast stochastics: Sideways
MACD: Slightly bullish
Ichimoku: Slightly bullish
OUTLOOK
NEAR-TERM: Sideways
MEDIUM-TERM: Slightly bullish
LONG-TERM: Sideways
CAD – March
The LGR Model: Long since December 4
The March Canadian dollar remains soft at a near two-week low after falling for two days. It had marked a near two-month high on December 13. The loonie has been advancing since December 6 and is currently overbought. The Canadian dollar had marked a high for the uptrend on September 14 and a significant bottom on June 1.
The short-term outlook is sideways. The medium-term outlook is slightly bullish and my model is long.
The 21-day exponential moving average supports at 1.0085. Further support is at .9919.
Immediate resistance is at 1.0160. Further resistance is at 1.0230.
INDICATORS
Fast stochastics: Bearish
MACD: Slightly bullish
Ichimoku: Slightly bullish
OUTLOOK
NEAR-TERM: Sideways
MEDIUM-TERM: Slightly bullish
LONG-TERM: Sideways
AUD – March
The LGR Model: Long since December 4
The March Australian dollar recovered from a 1 ½ week low and ended little chnaged on Thursday. It is trading just above the 21-day exponential moving average. On Monday it reached a new high for this leg of the uptrend.
The short-term outlook is sideways. The medium-term outlook is slightly bullish and my model is long.
Immediate resistance is at 1.0465. Monday’s peak is 1.0520.
Initial support is at 1.0398. The 55-day exponential moving average supports at 1.0324 and the 100-day exponential moving average at 1.0256.
INDICATORS
Fast stochastics: Bearish
MACD: Slightly bearish
Ichimoku: Sideways
OUTLOOK
NEAR-TERM: Sideways
MEDIUM-TERM: Slightly bullish
LONG-TERM: Sideways
