Back to Market Commentary by Product Group

November 6, 2009 8:50 am CST

US FX FUTURES REPORT

The foreign currency futures consolidated quietly overnight after making little progress on Thursday ahead of the US non-farm payrolls due at 8:30 EST. The interesting news came out of Australia: the Reserve Bank of Australia boosted its forecasts for economic growth for 2010 and indicated more interest rate increases are coming. The Aussie capitalized on this news. The Asia/Pacific stock markets reversed early losses and the European bourses are quiet ahead of the US data. Meanwhile, oil and gold are slightly higher.

The foreign currency futures should trade first up and then possibly down.  

My medium-term outlook for the European and the commodity currencies is now sideways with a strong bullish bias. My medium-term outlook for the yen remains bullish.

My model is now long all the foreign currency futures except Aussie.

Look for updates on my model’s positions on Twitter: They are free – for now. Then, you will have to subscribe to get the model turns in advance.

Good luck!

Cornelius
www.LucaFXTA.com


Overnight:
   
•    Australia: The Reserve Bank of Australia boosted its forecasts for economic growth for the coming year and indicated more interest rate increases in its quarterly Monetary Policy Statement. Its forecast of GDP growth was expanded to 1.75% to the end of calendar year 2009, compared to its previous forecast of 0.5% growth.
•    Australia: The Performance of Construction Index edged up to 50.9 in October from 50.8 in September, according to the Australian Industry Group and the Housing Industry Association.
•    Japan: Foreigners purchased about 46.5 billion yen more in Japan stocks than they sold for the week of October 25 to the 31st. It was the 4th straight week for foreigners as net buyers of Japanese stocks. Foreign residents were net sellers of Japan bonds and notes for the week, having sold 346.8 billion yen more than they bought. It was the 4th straight week for foreigners as net sellers.
•    Japan: The leading index rose to 86.4 in September from 83.2 in August. The coincident index stood at 92.5, up from 91.2 in August and the lagging index climbed 0.3 points to 84.5 in September.
•    Germany: Industrial orders rose 0.9% in September following the revised August's monthly increase to 2.1% from 1.4% reported earlier. On an annual basis, factory orders fell 13.1%, slower than revised 19.8% from initially reported 20.4% fall in August.
•    France: The trade deficit declined to EUR 1.75 billion in September from EUR 2.17 billion recorded in August.  Exports climbed to EUR 29.11 billion from August's EUR 28.47 billion and imports rose to EUR 30.86 billion from EUR 30.65 billion in the previous month.
•    Switzerland: The jobless rate rose to 4% in October from 3.9% in the prior month.
•    UK: The company insolvencies fell 4.7% on the quarter but increased 14.6% over the previous year.  
•    UK: The output price index rose 0.2% in October following a 0.5% increase in September. On a yearly basis the index climbed 1.7%, much larger than the 0.4% growth seen in September. Input prices climbed 2.6% compared to a revised 0.2% fall in the prior month. On a yearly they edged up 0.1% after contracting a revised 6.2% in September.   

 

Today’s economic calendar:

•    US: Non-Farm Payroll / Unemployment Rate for October
•    Canada: Unemployment Rate for October

FX FUTURES

December Euro FX Futures

Luca Model: Long since November 4 (Reversing short since October 26)

 

The December euro opens basically flat in an inside range after closing marginally lower on Thursday. Will the yo-yo markets stretch for an eighth day? The euro should trade first up and then down. My medium-term outlook is now sideways but the MACD continues to show bearish divergence.

The 21-day moving average supports at 1.4815. Wednesday’s low is 1.4700. The 55-day moving average supports at 1.4657. 

Thursday’s high is 1.4916. The next level is 1.4967. The top of the uptrend is 1.5062. 


INDICATORS
 
Fast stochastics: Bullish
MACD: Bearish – bearish divergence
Ichimoku: Bullish


OUTLOOK

NEAR-TERM: Slightly bullish
MEDIUM-TERM: Sideways 
LONG-TERM: Bullish


December Japanese Yen

Luca Model: Short since November 4

 

The December yen edged higher overnight after closing little changed on Thursday. My model is still short – if barely. The yen should first trade higher and then attempt another decline, but Wednesday’s low should hold. The medium-term outlook is bullish.

Strong resistance is at 111.09 from a 23.6% Fibonacci retracement level. Monday’s high is 111.83. The top of the upmove is 113.68.

The 21-day moving average is at 110.23. The 55-day moving average supports at 109.47. A pivot low follows at 108.12.   


INDICATORS
 
Fast stochastics: Slightly bullish
MACD: Slightly bullish
Ichimoku: Bullish

OUTLOOK

NEAR-TERM: Bullish early, then slightly bearish  
MEDIUM-TERM: Bullish
LONG-TERM: Bullish

 
December British Pound

Luca Model: Long since November 4

 The December pound edged higher overnight after closing marginally lower on Thursday. My model is long. The pound should trade slightly higher. The medium-term outlook is bearish.
 
Initial resistance is at 1.6625. The next cap is at 1.6689. Further resistance is at 1.6742.  

Immediate support is at 1.6521. The next level is 1.6456. The 21-day moving average supports at 1.6385 and the 55-day moving average at a distant 1.6307.  
 

INDICATORS
 
Fast stochastics: Bullish
MACD: Slightly bullish
Ichimoku: Sideways

OUTLOOK

NEAR-TERM: Slightly bullish
MEDIUM-TERM: Sideways  
LONG-TERM: Bullish

December Swiss Franc

Luca Model: Long since November 4 (Reversing short since October 23)

The December Swiss franc opens flat in the US after ending with small losses on Thursday. The short-term outlook is slightly bullish. Meanwhile, the medium-term outlook is sideways.    

Immediate resistance is at .9896. The high of the uptrend is .9971.  

The 21-day moving average supports at .9801. Further support is at .9737. The 55-day moving average supports at .9687. Distant support is at .9590.   


INDICATORS
 
Fast stochastics: Bullish  
MACD: Sideways  
Ichimoku: Bullish

OUTLOOK

NEAR-TERM: Slightly bullish
MEDIUM-TERM: Sideways  
LONG-TERM: Bullish

December Canadian Dollar

Luca Model: Long since November 4

 

The December Canadian dollar fell pretty sharply overnight but opens off the lows in the US. The loonie should first decline and then see some strength later today. The medium-term outlook is still bearish.  

Initial support is at .9338 from the 55-day moving average. The low of the day is .9300. A pivot low is at .9212. Distant support is marked at .9094.

The 21-day moving average resists at .9409. Further resistance is at .9460. Distant resistance is at .9539.  


INDICATORS
 
Fast stochastics: Bullish
MACD: Bearish
Ichimoku: Slightly bullish

OUTLOOK

NEAR-TERM: Bearish early, then bullish  
MEDIUM-TERM: Sideways  
LONG-TERM: Bullish

December Australian Dollar

Luca Model: Long since November 6 (Reversing short since October 23)

The December Australian dollar rallied to the highest level of the week following the good local economic outlook after ending with small losses in an inside range on Thursday. The medium-term outlook is sideways and my model went long. The Aussie should encounter further strength.

Good resistance is at .9170. The top of the uptrend is at .9282.  

Immediate support is at .9079. The 21-day moving average is supporting at .9028.  A distant pivot low is at .8822.  


INDICATORS
   
Fast stochastics: Bullish
MACD: Bearish    
Ichimoku: Bullish (overbought)  

OUTLOOK

NEAR-TERM: Slightly bullish
MEDIUM-TERM: Sideways  
LONG-TERM: Bullish

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