The appetite for risk has been improving in FX since Tuesday during the Federal Reserve's Open Market Committee’s two-day meeting. The European and commodity currencies are either retaining or adding to recent gains, while the yen is edging lower. The Asian stock markets advanced.
The short-term outlook for most of the foreign currencies is sideways. The medium-term outlook for most of the foreign currencies is sideways. The LGR short-term model is short on most foreign currencies.
Overnight
- Japan: Retail sales rose 0.1% in December following the downwardly revised 0.1% contraction in November.
Today's economic calendar
Switzerland: The UBS consumption indicator climbed to 1.34 in December from 1.23 in November.
Switzerland: The KOF leading indicator slipped to 1.05 in January from 1.28 in December.
Eurozone: Consumer confidence for January
UK: Consumer credit for December
UK: Mortgage approvals for December.
EUR – March
The LGR Model: Long since January 24
The March euro is extending recent gains and is trading at a new 11-month high. The euro is trading in a medium-term bullish flag targeting the 1.4200 and in a short-term bullish flag targeting the 1.3750 area. It is trading above the 21-day exponential moving. The euro bottomed at an over two-year low in July.
The short-term outlook is slightly bullish. The medium-term outlook is slightly bullish and the LGR model is long.
Immediate resistance is at 1.3576. Further resistance is at 1.3605.
Initial support is at 1.3485. Further support is at 1.3415 and 1.3355.
INDICATORS
Fast stochastics: Bullish
MACD: Bullish
Ichimoku: Bullish
OUTLOOK
NEAR-TERM: Slightly bullish
MEDIUM-TERM: Bullish
LONG-TERM: Sideways
JPY – March
The LGR Model: Short since January 24
The oversold March Japanese yen slipped in Asia after making a small correction from a new near 2 1/2-year low on Monday and half of Tuesday. The yen is trading below the neckline of a long-term head–and-shoulders pattern and the target is the 1.0500 area. It is trading well below the 21-day exponential moving average. The yen had peaked on September 13.
The short-term outlook is sideways to slightly bearish. The medium-term outlook is bearish and the LGR model is short.
A pivot low is at 1.0961. Further support is at 1.0795.
Immediate resistance is at 1.1075. Further resistance is at 1.1160.
INDICATORS
Fast stochastics: Bearish
MACD: Sideways
Ichimoku: Bearish
OUTLOOK
NEAR-TERM: Sideways to slightly bearish
MEDIUM-TERM: Bearish
LONG-TERM: Bearish
GBP – March
The LGR Model: Short since January 14
The March pound remains firm in an inside range after advancing on Tuesday and falling to a new five-month low on Monday. It pierced the 61.8% Fibonacci retracement of the June-January uptrend. The pound is approaching the bottom of a long-term (four-year) triangle in the 1.56 area; it is also aiming for the target of a double top in the 1.54 area. It is trading well below the 21-day exponential moving average and is oversold. The pound had marked a 17-month high on January 2 and bottomed on June 1.
The short-term outlook is sideways. The medium-term outlook is sideways and the LGR model is short.
Initial resistance is at 1.5765. Further resistance is at 1.5828 and 1.5890.
Immediate support is at 1.5670. Further support is at 1.5625.
INDICATORS
Fast stochastics: Slightly bullish
MACD: Bearish
Ichimoku: Bearish
OUTLOOK
NEAR-TERM: Sideways
MEDIUM-TERM: Sideways
LONG-TERM: Sideways
CHF – March
The LGR Model: Short since January 14
The March Swiss franc is consolidating after reaching at a two-week high above the 21-day exponential moving average on Tuesday. The franc is trading in a medium-term symmetrical triangle. It had marked a seven-month high on December 20 and a 19-month low on July 24.
The short-term outlook is sideways. The medium-term outlook is slightly bullish but the LGR model is short.
Immediate resistance is at 1.0900. Further resistance is at 1.0986.
Initial support is at 1.0795. Further support is at 1.0700 and 1.0657.
INDICATORS
Fast stochastics: Bullish
MACD: Sideways
Ichimoku: Sideways
OUTLOOK
NEAR-TERM: Sideways
MEDIUM-TERM: Slightly bullish
LONG-TERM: Sideways
CAD – March
The LGR Model: Short since January 18
The March Canadian dollar remains firm after rallying on Tuesday and reaching a six-month low on both Friday and Monday. It is trading below the 50% mark of the June-September uptrend. The loonie had peaked at a 2 ½-month high on January 11. 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 sideways and the LGR model is short.
Immediate resistance is at .9985. Further resistance is at 1.0065.
Initial support is at .9870. Further support is at .9835 and .9735.
INDICATORS
Fast stochastics: Slightly bullish
MACD: Bearish
Ichimoku: Bearish
OUTLOOK
NEAR-TERM: Sideways
MEDIUM-TERM: Sideways
LONG-TERM: Sideways
AUD – March
The LGR Model: Long since January 2
The March Australian dollar is quiet after advancing on Tuesday and recovering from a 3 1/2-week low on Monday. It is trading below the 21-day exponential moving average. The Aussie marked a new high for the uptrend on January 10.
The short-term outlook is sideways. The medium-term outlook is sideways and my model is long.
Immediate resistance is at 1.0445. Further resistance is at 1.0510 and 1.0547.
Initial support is at 1.0378. Further support follows at 1.0347 and 1.0280.
INDICATORS
Fast stochastics: Slightly bullish
MACD: Slightly bearish
Ichimoku: Slightly bearish
OUTLOOK
NEAR-TERM: Sideways
MEDIUM-TERM: Sideways
LONG-TERM: Sideways
