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The appetite for risk improved unexpectedly ahead of the US open following a strong Spanish bond auction and robust ZEW surveys in the Eurozone and Germany. The drop in the regional industrial production was a sideshow, given that the leaders – Germany and France – had already announced steep declines at the end of the 2011. The European and commodity currencies open higher or off their worst levels, overcoming early profit taking. Only the yen lost the floor from under its feet amid rising appetite for risk.
The Asia/Pacific stock indexes ended mostly higher, the European bourses are little changed on both sides of zero and the US stock indexes are slightly higher in pre-open markets. Meanwhile, oil is up and gold down.
The short-term outlook for most of the European and commodity currencies turned sideways to slightly bullish. The medium-term outlook for most of the foreign currencies is slightly bullish. The LGR short-term model is long all the European and the commodity currencies.
Look for updates on my model's positions on Twitter: They are free, but with considerable delay. Once offered, you will have to pay subscription to get the model turns in advance.
Good luck!
Cornelius
www.lucafxta.com
Overnight:
Today's economic calendar:
EUR – March
Luca Model: Long since January 17
The March euro opens higher in the US after bouncing from a one-week low with help from the firm Spanish auction, strong ZEW reports and the 21-day exponential moving average. It peaked at a two-month high on Thursday. The euro climbed back above the 55-day exponential moving average.
The short-term outlook is sideways to slightly bullish. The medium-term outlook is slightly bullish as well. My model is still long.
Immediate resistance is at 1.3235. Further resistance is at 1.3290.
The 55-day exponential moving average supports at 1.3170 and the 21-day exponential moving average at 1.3126. The next floor is 1.3055.
INDICATORS
Fast stochastics: Sideways
MACD: Sideways
Ichimoku: Bullish
OUTLOOK
NEAR-TERM: Sideways to slightly bullish
MEDIUM-TERM: Slightly bullish
LONG-TERM: Sideways
JPY – March
Luca Model: Short since February 7
The oversold March Japanese yen plunged to a near three-week low ahead of the US open, counterbalancing the vaulting European and commodity currencies. Naturally, the yen crosses are in demand. The yen nicked the trendline rising since October 31, when the BoJ intervened and aggressively sold its currency. The short-term outlook is sideways to slightly bearish. The medium-term outlook is slightly bullish but my model is short.
An initial pivot low is 1.2779. Another pivot is at 1.2699.
Immediate resistance is at 1.2855. The next cap is 1.2930. The 21-day exponential moving average resists at 1.2972.
INDICATORS
Fast stochastics: Bearish
MACD: Bearish
Ichimoku: Sideways
OUTLOOK
NEAR-TERM: Sideways to slightly bearish
MEDIUM-TERM: Slightly bullish
LONG-TERM: Bullish
GBP – March
Luca Model: Long since January 17
The March pound opens well off a two-week low in the US. It is trading again above the 21-day exponential moving average after spiking below it in Asia. It had peaked at a near three-month high last week and branded a new low for the downtrend on January 13.
The short-term outlook is sideways to slightly bullish. The medium-term outlook is slightly bullish and my model is long.
The 200-day exponential moving average caps at 1.5791. Further resistance is at 1.5855. The peak of a medium-term uptrend is 1.5924.
The 21-day exponential moving average supports at 1.5710 and the 55-day exponential moving average at 1.5664. The next support is 1.5570.
INDICATORS
Fast stochastics: Bearish
MACD: Bearish
Ichimoku: Sideways
OUTLOOK
NEAR-TERM: Sideways to slightly bullish
MEDIUM-TERM: Slightly bullish
LONG-TERM: Bearish
CHF – March
Luca Model: Long since January 17
The March Swiss franc opens little changed in the US after bouncing with help from the 21-exponential moving average. The franc marked a two-month high on Thursday and has found a base from the 21-day exponential moving average since last week. The franc has recovered steadily since January 17 and marked a new low for the downtrend on January 9.
The short-term outlook is sideways to slightly bullish. The medium-term outlook is slightly bullish and my model is long.
The 100-day exponential moving average caps at 1.1010. Good resistance is at 1.1058.
The 21-day exponential moving average supports at 1.0861. Further support is at 1.0800.
INDICATORS
Fast stochastics: Slightly bullish
MACD: Slightly bearish
Ichimoku: Sideways
OUTLOOK
NEAR-TERM: Sideways to slightly bullish
MEDIUM-TERM: Slightly bullish
LONG-TERM: Sideways
CAD – March
Luca Model: Long since January 10
The March Canadian dollar opens slightly lower in the US after struggling higher in an inside range on Monday. It had marked a new high for the uptrend on Thursday. The loonie has been trading in a choppy uptrend since Thanksgiving.
The short-term outlook is sideways to slightly bullish. The medium-term outlook is slightly bullish and my model is long.
Immediate resistance is at 1.0022. A pivot high resists at 1.0075.
The 21-day exponential moving average supports at .9960. Further support is seen at .9850.
INDICATORS
Fast stochastics: Bearish
MACD: Slightly bearish
Ichimoku: Bullish
OUTLOOK
NEAR-TERM: Sideways to slightly bullish
MEDIUM-TERM: Slightly bullish
LONG-TERM: Sideways
AUD – March
Luca Model: Long since December 20
The overbought March Australian dollar opens flat in the US after closing slightly higher on Monday, and remains in an inside range. A short-term peak is in place. The Aussie has been well entrenched in the uptrend since Thanksgiving.
The short-term outlook is sideways to slightly bullish. The medium-term outlook is bullish and my model is long.
Immediate resistance is at 1.0745. The top of the uptrend is 1.0795.
Initial support is at 1.0620. The 21-day exponential moving average follows at 1.0566. Further support is at 1.0469.
INDICATORS
Fast stochastics: Bearish
MACD: Slightly bearish
Ichimoku: Bullish
OUTLOOK
NEAR-TERM: Sideways to slightly bullish
MEDIUM-TERM: Bullish
LONG-TERM: Bullish
View All Market Commentary
The Asia/Pacific stock indexes ended mostly higher, the European bourses are little changed on both sides of zero and the US stock indexes are slightly higher in pre-open markets. Meanwhile, oil is up and gold down.
The short-term outlook for most of the European and commodity currencies turned sideways to slightly bullish. The medium-term outlook for most of the foreign currencies is slightly bullish. The LGR short-term model is long all the European and the commodity currencies.
Look for updates on my model's positions on Twitter: They are free, but with considerable delay. Once offered, you will have to pay subscription to get the model turns in advance.
Good luck!
Cornelius
www.lucafxta.com
Overnight:
- Australia: The National Australia Bank's confidence index rose one point to +4 in January.
- Japan: Industrial production was revised down to 3.8% from 4% month-on-month in December.
- Japan: The Bank of Japan decided to expand the size of its asset purchase by JPY 10 trillion to JPY 30 trillion in order to overcome deflation and achieve sustainable economic growth.
- UK: RICS house price balance remained unchanged at -16 in January.
- Eurozone: Moody's downgraded Italy, Malta, Portugal, Slovakia, Slovenia, and Spain. The rating agency issued negative outlooks for Austria, France, and UK, which are keeping the Aaa rating.
- Eurozone: Industrial production fell 1.1% in December after being flat in November.
- Eurozone: The ZEW survey improved to -8.1 from -32.5 in February.
- Germany: The ZEW survey surged to 5.4 in February from -21.6 in January.
- France: Payroll employment decreased by 0.2% in the fourth quarter following stagnation in the third quarter.
- UK: The DCLG house price index rose 0.1% on an annual basis in December after falling 0.3% in November.
- UK: CPI declined 0.5% in January, offsetting December's 0.4% rise. Annual inflation slowed to 3.6% from 4.2% and core inflation slowed to 2.6% from 3%.
- UK: The Leading Indicator Index improved to -0.5% in January from -0.6% in December.
Today's economic calendar:
- US: Retail sales for January
- US: Business inventories for December
EUR – March
Luca Model: Long since January 17
The March euro opens higher in the US after bouncing from a one-week low with help from the firm Spanish auction, strong ZEW reports and the 21-day exponential moving average. It peaked at a two-month high on Thursday. The euro climbed back above the 55-day exponential moving average.
The short-term outlook is sideways to slightly bullish. The medium-term outlook is slightly bullish as well. My model is still long.
Immediate resistance is at 1.3235. Further resistance is at 1.3290.
The 55-day exponential moving average supports at 1.3170 and the 21-day exponential moving average at 1.3126. The next floor is 1.3055.
INDICATORS
Fast stochastics: Sideways
MACD: Sideways
Ichimoku: Bullish
OUTLOOK
NEAR-TERM: Sideways to slightly bullish
MEDIUM-TERM: Slightly bullish
LONG-TERM: Sideways
JPY – March
Luca Model: Short since February 7
The oversold March Japanese yen plunged to a near three-week low ahead of the US open, counterbalancing the vaulting European and commodity currencies. Naturally, the yen crosses are in demand. The yen nicked the trendline rising since October 31, when the BoJ intervened and aggressively sold its currency. The short-term outlook is sideways to slightly bearish. The medium-term outlook is slightly bullish but my model is short.
An initial pivot low is 1.2779. Another pivot is at 1.2699.
Immediate resistance is at 1.2855. The next cap is 1.2930. The 21-day exponential moving average resists at 1.2972.
INDICATORS
Fast stochastics: Bearish
MACD: Bearish
Ichimoku: Sideways
OUTLOOK
NEAR-TERM: Sideways to slightly bearish
MEDIUM-TERM: Slightly bullish
LONG-TERM: Bullish
GBP – March
Luca Model: Long since January 17
The March pound opens well off a two-week low in the US. It is trading again above the 21-day exponential moving average after spiking below it in Asia. It had peaked at a near three-month high last week and branded a new low for the downtrend on January 13.
The short-term outlook is sideways to slightly bullish. The medium-term outlook is slightly bullish and my model is long.
The 200-day exponential moving average caps at 1.5791. Further resistance is at 1.5855. The peak of a medium-term uptrend is 1.5924.
The 21-day exponential moving average supports at 1.5710 and the 55-day exponential moving average at 1.5664. The next support is 1.5570.
INDICATORS
Fast stochastics: Bearish
MACD: Bearish
Ichimoku: Sideways
OUTLOOK
NEAR-TERM: Sideways to slightly bullish
MEDIUM-TERM: Slightly bullish
LONG-TERM: Bearish
CHF – March
Luca Model: Long since January 17
The March Swiss franc opens little changed in the US after bouncing with help from the 21-exponential moving average. The franc marked a two-month high on Thursday and has found a base from the 21-day exponential moving average since last week. The franc has recovered steadily since January 17 and marked a new low for the downtrend on January 9.
The short-term outlook is sideways to slightly bullish. The medium-term outlook is slightly bullish and my model is long.
The 100-day exponential moving average caps at 1.1010. Good resistance is at 1.1058.
The 21-day exponential moving average supports at 1.0861. Further support is at 1.0800.
INDICATORS
Fast stochastics: Slightly bullish
MACD: Slightly bearish
Ichimoku: Sideways
OUTLOOK
NEAR-TERM: Sideways to slightly bullish
MEDIUM-TERM: Slightly bullish
LONG-TERM: Sideways
CAD – March
Luca Model: Long since January 10
The March Canadian dollar opens slightly lower in the US after struggling higher in an inside range on Monday. It had marked a new high for the uptrend on Thursday. The loonie has been trading in a choppy uptrend since Thanksgiving.
The short-term outlook is sideways to slightly bullish. The medium-term outlook is slightly bullish and my model is long.
Immediate resistance is at 1.0022. A pivot high resists at 1.0075.
The 21-day exponential moving average supports at .9960. Further support is seen at .9850.
INDICATORS
Fast stochastics: Bearish
MACD: Slightly bearish
Ichimoku: Bullish
OUTLOOK
NEAR-TERM: Sideways to slightly bullish
MEDIUM-TERM: Slightly bullish
LONG-TERM: Sideways
AUD – March
Luca Model: Long since December 20
The overbought March Australian dollar opens flat in the US after closing slightly higher on Monday, and remains in an inside range. A short-term peak is in place. The Aussie has been well entrenched in the uptrend since Thanksgiving.
The short-term outlook is sideways to slightly bullish. The medium-term outlook is bullish and my model is long.
Immediate resistance is at 1.0745. The top of the uptrend is 1.0795.
Initial support is at 1.0620. The 21-day exponential moving average follows at 1.0566. Further support is at 1.0469.
INDICATORS
Fast stochastics: Bearish
MACD: Slightly bearish
Ichimoku: Bullish
OUTLOOK
NEAR-TERM: Sideways to slightly bullish
MEDIUM-TERM: Bullish
LONG-TERM: Bullish
View All Market Commentary
*Disclaimer: The information in the Market Commentaries was obtained from sources believed to be reliable, but we do not guarantee its accuracy. Neither the information nor any opinion expressed therein constitutes a solicitation of the purchase or sale of any futures or options contracts.
