The appetite for risk is improving ahead of the US open on hopes that the soon-to-start "fiscal cliff" negotiations will prove fruitful. The European and commodity currencies are advancing, while the yen is digging further down. Most Asia/Pacific stock indexes advanced. The European bourses are up and the the US stock markets are higher in pre-open trading. The gold/oil ratio is down.
The short-term outlook for the European and commodity currencies is sideways to slightly bullish. The medium-term outlook for most of the foreign currencies is sideways. The LGR short-term model is short on all foreign currencies.
Happy holidays! Good luck!
Overnight
China: Total industrial profits increased 22.8% year-on-year in November, faster than the 20.5% gain reported in October.
Japan: Housing starts grew 10.3% year-on-year in November, down sharply from 25.2% in October.
Japan: Construction orders fell 2.1% in November after rising 29.1% y-o-y in October.
Japan: The newly appointed Finance Minister Taro Aso said that the government will limit fresh issuance of bonds while compiling the fiscal 2013 budget.
France: Consumer confidence rose to 86 in December from 84 in November.
France: Producer prices decreased 0.5% in November after increasing 0.5% in October.
Italy: The confidence index for the manufacturing industry rose to 88.9 in December from 88.5 in November.
Switzerland: The UBS consumption indicator fell to 1.23 in November from 1.30 in October.
UK: The mortgage approvals for house purchases increased to 33,634 in November from 33,128 in December.
Today's economic calendar
US: Initial jobless claims (December 22)
US: Consumer confidence for November
US: New home sales for November
EUR – March
The LGR Model: Short since December 21
The March euro opens at a one-week high in the US. The euro marked an eight-month high on December 19. It is still trading above the 21-day exponential moving average. The euro had bottomed at an over two-year low in July.
The short-term outlook is sideways to slightly bullish. The medium-term outlook is slightly bullish but my model is short.
A short-term peak is at 1.3321. Further resistance is at 1.3390.
Immediate support is at 1.3230. The next floor is 1.3170. The 21-day exponential moving average supports at 1.3122.
INDICATORS
Fast stochastics: Bullish
MACD: Slightly bullish
Ichimoku: Slightly bullish
OUTLOOK
NEAR-TERM: Sideways to slightly bullish
MEDIUM-TERM: Slightly bullish
LONG-TERM: Sideways
JPY – March
The LGR Model: Short since September 28
The oversold March Japanese yen opens at a new 20-month low. 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 bearish. The medium-term outlook is bearish and the model is short. Immediate support is at 1.1650. The next levels are 1.1595 and 1.1525.
Initial resistance is at 1.1790. Further resistance is at 1.1870.
INDICATORS
Fast stochastics: Bearish
MACD: Bearish
Ichimoku: Bearish
OUTLOOK
NEAR-TERM: Bearish
MEDIUM-TERM: Bearish
LONG-TERM: Bearish
GBP – March
The LGR Model: Short since December 21
The March pound opens slightly higher after hitting a ten-day low on Monday. It is trading just around the 21-day exponential moving average. The pound had marked a 16-month high on December 19 and bottomed at a 4 1/2-month low on June 1.
The short-term outlook is sideways to slightly bullish. The medium-term outlook is slightly bullish but my model is short.
Immediate resistance is at 1.6205. The December 19 high is 1.6304.
The 21-day exponential moving average supports at 1.6126. Further support is at 1.6065 and 1.6005.
INDICATORS
Fast stochastics: Sideways
MACD: Sideways
Ichimoku: Slightly bullish
OUTLOOK
NEAR-TERM: Sideways to slightly bullish
MEDIUM-TERM: Slightly bullish
LONG-TERM: Sideways
CHF – March
The LGR Model: Short since December 21
The March Swiss franc opens at a one-week high after marking a seven-month high on December 20. It is trading 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 to slightly bullish. The medium-term outlook is slightly bullish but the LGR model is short.
The high of December 20 is 1.1026. Further resistance is at 1.1120.
Initial support is at 1.0945. The 21-day exponential moving average supports at 1.0873.
INDICATORS
Fast stochastics: Bullish
MACD: Slightly bullish
Ichimoku: Sideways
OUTLOOK
NEAR-TERM: Sideways to slightly bullish
MEDIUM-TERM: Slightly bullish
LONG-TERM: Sideways
CAD – March
The LGR Model: Short since December 19
The March Canadian dollar opens higher after sinking to a near 3 1/2-week low on Friday. It had marked a near two-month high on December 13. The loonie has been advancing since November 16. 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 to slightly bullish. The medium-term outlook is sideways and my model is short.
The 21-day exponential moving average resists at 1.0076. Further resistance is at 1.0160 and 1.0230.
Initial support is at 1.0015. A pivot low is at .9919.
INDICATORS
Fast stochastics: Sideways
MACD: Slightly bearish
Ichimoku: Slightly bearish
OUTLOOK
NEAR-TERM: Sideways to slightly bullish
MEDIUM-TERM: Sideways
LONG-TERM: Sideways
AUD – March
The LGR Model: Short since December 18
The March Australian dollar opens slightly higher, but still relatively close to near a one-month low that was reached on Wednesday. It is trading below the 21-day exponential moving average. The Aussie reached a new high for this leg of the uptrend on December 17.
The short-term outlook is sideways to slightly bullish. The medium-term outlook is sideways and my model is short.
The 21-day exponential moving average resists at 1.0374. The next cap is 1.0465.
Immediate support is at 1.0270. Further support is at 1.0210.
INDICATORS
Fast stochastics: Sideways
MACD: Slightly bearish
Ichimoku: Slightly bearish
OUTLOOK
NEAR-TERM: Sideways to slightly bullish
MEDIUM-TERM: Sideways
LONG-TERM: Sideways
