Short-term outlook slightly bullish for european and commodity currencies

The appetite for risk improved selectively ahead of the US open. The foreign currencies start divergently after Thanksgiving. The European and the commodity currencies open higher; the pound remains firm at an over two-year high. The yen starts under pressure. Euro/yen is trading at a four-year high. The Asian stock markets were mixed. The European bourses are up and the US stock markets are higher in pre-open trading. Gold, oil and silver are up.

The short-term outlook is slightly bullish for the European and the commodity currencies, and sideways to slightly bearish for yen. The medium-term outlook for most foreign currencies is sideways. The LGR short-term model is long European currencies, and short yen and commodity dollars.

Good luck!

Overnight

• Eurozone: The economic confidence index rose to 98.5 in November from 97.7 in October.

• Germany: The adjusted jobless rate remained unchanged at 6.9% in November.

• Germany: The harmonized index of consumer prices increased 1.6% year-on-year in November after rising 1.2% in October

• Switzerland: Gross Domestic Product rose 0.5% in the third quarter.

• Canada: Current account deficit widened to $15.47 billion during the third quarter following $15.92 billion in the previous quarter.

• Canada: Industrial Product prices contracted 0.3% in October, more than September’s 0.2% contraction. The Raw Material Price Index contracted 2.3% in the same period, more than the previous reading of -1.2%.

• Japan: Nomura/ JMMA Manufacturing Purchasing Manager Index rose to 55.1 in November from 54.2 in October.

• Japan: National Consumer Price Index rose 1.1% year-on-year in November, the same as in October.

• Japan: Overall household spending rose 0.9% year-on-year in October following +3.7% in September.

• Japan: Unemployment rate came in unchanged at 4.0% in October.

• Japan: Industrial production rose 0.5% in October following -0.9% in September.

• UK: Gfk consumer confidence came in at -12 in November following -11 in October.

• Australia: Private sector credit rose 0.3% in October, the same as in September.

• Eurozone: Consumer Price Index rose to 0.9% year-on-year in November, from 0.7% in October.

• Eurozone: Unemployment rate slipped to 12.1% in October from a record-high 12.2% in September.

• Germany: Retail sales fell 0.8% month-on-month in October after -0.2% in September.

• France: Household consumption of goods fell 0.2% in October, following a 0.1% decline in September.

• Italy: Unemployment rate remained unchanged at an all-time high of 12.5% in October.

• Italy: The producer price index fell 2.7% year-on-year in October following a 2.2% decrease in September.

• Switzerland: The KOF economic barometer increased to 1.85 in November from 1.71 in October.

• UK: Mortgage approvals for house purchases rose to 67,701 in October from 66,891 in September.

Today's economic calendar

• Canada: Gross Domestic Product for the third quarter

EUR – December

The LGR Model: Long since November 21

The December euro opens near a four-week high in the US. It is capped by the top of the Ichimoku cloud. The euro is trading above the 21-day exponential moving average. It spiked down to a near two-month low on November 7. The euro peaked at a near two-year high on October 25 and bottomed at an over two-year low in July 2012.

The short-term outlook is slightly bullish. The medium-term outlook is bullish and the LGR model is long.

Initial resistance is at 1.3625. Further resistance is at 1.3695.

The 21-day exponential moving average supports at 1.3531. Further support is at 1.3475 and 1.3393.

INDICATORS

Fast stochastics: Bullish

MACD: Slightly bullish

Ichimoku: Slightly bullish

OUTLOOK

NEAR-TERM: Slightly bullish

MEDIUM-TERM: Slightly bullish

LONG-TERM: Sideways

JPY – December

The LGR Model: Short since October 29

The December Japanese yen opens off a fresh six-month low in the US. The yen has been dropping since November 8, when it broke the bottom of a symmetrical triangle. It remains heavy well below the 21-day exponential moving average. The yen formed a medium-term low in July. It bottomed at a 4 1/2-year low on May 22 and formed a long-term peak on June 13, 2012.

The short-term outlook is sideways to slightly bearish. The medium-term outlook is slightly bearish and the LGR model is short.

Initial support is at .9700. A pivot low is at .9640.

Immediate resistance is at .9810. The next resistance levels are .9890 and .9955. The 21-day exponential moving average caps at a distant .9978.

INDICATORS

Fast stochastics: Bearish

MACD: Bearish

Ichimoku: Bearish

OUTLOOK

NEAR-TERM: Sideways to slightly bearish

MEDIUM-TERM: Bearish

LONG-TERM: Bearish

GBP – December

The LGR Model: Long since November 13

The December pound opens at an over two-year high in the US after surging on Wednesday. It marked a two-month low on November 12. The pound bottomed at a three-year low on July 9.

The short-term outlook is slightly bullish. The medium-term outlook is bullish and the LGR model is long.

Initial resistance is at 1.6395. Further resistance is at 1.6440.

Immediate support is at 1.6250. The 21-day exponential moving average supports at a distant 1.6130.

INDICATORS

Fast stochastics: Bullish

MACD: Bullish

Ichimoku: Bullish

OUTLOOK

NEAR-TERM: Slightly bullish

MEDIUM-TERM: Bullish

LONG-TERM: Slightly bullish

CHF – December

The LGR Model: Long since November 21

The December Swiss franc starts at a four-week high in the US. It is holding above the 21-day exponential moving average. The franc has been bordered by the rising 38.2% and 50% Fibonacci fan lines for 2 1/2 weeks. It bottomed at a 1 ½-month low on November 7. The franc is trading above the trend line rising since July. It peaked at a near two-year high on October 24. The franc formed a medium-term bottom on July 10 and a long-term bottom on May 22.

The short-term outlook is sideways to slightly bullish. The medium-term outlook is sideways and the LGR model is long.

Immediate resistance is at 1.1063. Further resistance is at 1.1145.

The 21-day exponential moving average supports at 1.0987. Further support is at 1.0879. A pivot low is at 1.0804.

INDICATORS

Fast stochastics: Slightly bullish

MACD: Slightly bullish

Ichimoku: Slightly bullish

OUTLOOK

NEAR-TERM: Sideways to slightly bullish

MEDIUM-TERM: Sideways

LONG-TERM: Sideways

CAD – December

The LGR Model: Short since November 18

The December Canadian dollar is seeking a floor after falling for five days and hitting a 4 ½-month low on Wednesday. The loonie remains well below the 21-day exponential moving average and is oversold. The loonie peaked at a one-month high on October 22. A medium-term peak was formed on July 31 and a medium-term bottom on July 5.

The short-term outlook is sideways. The medium-term outlook is bearish and the LGR model is short.

A pivot low is at .9409. Further support is at .9375 and .9335.

Immediate resistance is at .9465. The 21-day exponential moving average caps at .9524.

INDICATORS

Fast stochastics: Bearish

MACD: Bearish

Ichimoku: Bearish

OUTLOOK

NEAR-TERM: Sideways

MEDIUM-TERM: Bearish

LONG-TERM: Sideways

AUD – December

The LGR Model: Short since November 20

The December Australian dollar reversed from a near three-month low and opens slightly higher in the US. It is trading below the neckline of a head-and-shoulder formation targeting the .9780 area. The Aussie formed a medium-term high on April 11 and a long-term top on January 10. It bottomed at a three-year low on August 5.

The short-term outlook is sideways. The medium-term outlook is bearish and the LGR model is short.

Immediate support is at .9045. Further support is at .8975 and .8825. Initial resistance is at .9140. The 21-day exponential moving average caps at .9275.

INDICATORS

Fast stochastics: Bearish

MACD: Bearish

Ichimoku: Bearish

OUTLOOK

NEAR-TERM: Sideways

MEDIUM-TERM: Bearish

LONG-TERM: Sideways