US FX
The appetite for risk remains arrested ahead of the US open due to ongoing concern about the Eurozone and the fragility of the US economic recovery. Adversity to risk is reflected by the falling EUR/JPY; the cross is falling in line with the Bund-JGB yield spread and its bearish flag is targeting the 100 area. Most of the European and commodity currencies open little changed in the US after falling on Wednesday. Only the Aussie opens higher, in part because of the declining local unemployment rate. The Asian equity indexes ended mixed, the European bourses lower and the US markets are mixed in pre-open trading. Gold and oil are down.
The short-term outlook for the European and commodity 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.
Good luck!
www.lucafxta.com
Overnight
Today's economic calendar
EUR – June
Luca Model: Short since May 7
The June euro opens on a weak note in an inside range after falling for two days and hitting a 3 ½-month low on Wednesday. Euro had closed down every day of last week and in two of this week's three days. It is holding well below the 21-day moving averages, so it's oversold.
The short-term outlook is sideways. The medium-term outlook turned bearish after the euro broke the bottom of a symmetrical triangle. My model is short.
Wednesday's low is 1.2913. The next floors are 1.2900 and 1.2835.
Initial resistance is at 1.3015. The next cap is 1.3070. The 21-day exponential moving average resists at 1.3120.
INDICATORS
Fast stochastics: Bearish
MACD: Bearish
Ichimoku: Bearish
OUTLOOK
NEAR-TERM: Sideways
MEDIUM-TERM: Bearish
LONG-TERM: Sideways
JPY – June
Luca Model: Long since March 21
The June Japanese yen is consolidating around the 100-day moving average after stretching to a 2 ½-month high on Wednesday. It remains in a channel rising since March 21.
The short-term outlook is sideways. The medium-term outlook is sideways and my model is long.
The 200-day moving average resists at 1.2598. Further resistance is at 1.2690.
Immediate support is at 1.2490. The 21-day exponential moving average supports at 1.2428.
INDICATORS
Fast stochastics: Bullish
MACD: Bullish
Ichimoku: Bullish
OUTLOOK
NEAR-TERM: Sideways
MEDIUM-TERM: Sideways
LONG-TERM: Bearish
GBP – June
Luca Model: Long since April 17
The June pound opens a little lower in the US after closing off a 2 1/2-week low on Wednesday. It had briefly penetrated the support of the 21-day exponential moving average. The pound had peaked at an eight-month high last Monday.
The short-term outlook is sideways. The medium-term outlook is slightly bullish and my model is long.
Initial support is at 1.6062. Further support is at 1.6035 and 1.5950.
Immediate resistance is at 1.6200. The top of the uptrend is 1.6298.
INDICATORS
Fast stochastics: Bearish
MACD: Slightly bearish
Ichimoku: Sideways
OUTLOOK
NEAR-TERM: Sideways
MEDIUM-TERM: Bullish
LONG-TERM: Sideways
CHF – June
Luca Model: Short since May 2
The June Swiss franc opens softly in an inside range after falling again and reaching a near two-month low on Wednesday. The franc peaked last Tuesday. It has been making a choppy upmove since April 16. It is trading below the 100-day exponential moving average. The franc trades in a symmetrical triangle.
The short-term outlook is sideways. The medium-term outlook is bullish and my model is long again.
Wednesday's low is 1.0754. A pivot low is 1.0725.
Initial resistance is at 1.0830. The next cap is 1.0880. The 21-day exponential moving average resists at 1.0922.
INDICATORS
Fast stochastics: Bearish
MACD: Bearish
Ichimoku: Slightly bearish
OUTLOOK
NEAR-TERM: Sideways
MEDIUM-TERM: Sideways
LONG-TERM: Sideways
CAD – June
Luca Model: Short since May 7 (reversing long since April 24)
The June Canadian dollar opens lower in an inside range and below the 200-day moving average after closing off a 3 ½-month low on Wednesday. It briefly broke the bottom of the channel rising since mid-December. It remains well below the 21-day exponential moving average. The loonie had put in a medium-term peak to on April 27.
The short-term outlook is sideways. The medium-term outlook is sideways and my model is short.
A pivot low is .9928. Further support is at .9807.
The 100-day moving average caps at .9996 and the 21-day moving average at 1.0056.
INDICATORS
Fast stochastics: Bearish
MACD: Bearish
Ichimoku: Slightly bearish
OUTLOOK
NEAR-TERM: Sideways
MEDIUM-TERM: Bullish
LONG-TERM: Slightly bullish
AUD – June
Luca Model: Short since April 30
The June Australian dollar is the exception to the rule and opens up in the US after sinking to the low of the year on Wednesday. It is trading well below the 200-day exponential moving average. The Aussie had peaked on the last day of February.
The short-term outlook is sideways to slightly bullish. The medium-term outlook is sideways and my model is long.
Initial resistance is at 1.0105. The 200-day moving average resists at 1.0173. The 21-day exponential moving average caps at a distant 1.0219.
The bottom of the downtrend is .9981. Further support is at .9920.
INDICATORS
Fast stochastics: Sideways
MACD: Bearish
Ichimoku: Bearish
OUTLOOK
NEAR-TERM: Sideways to slightly bullish
MEDIUM-TERM: Bearish
LONG-TERM: Sideways
View All Market Commentary
The short-term outlook for the European and commodity 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.
Good luck!
www.lucafxta.com
Overnight
- Australia: The unemployment rate fell to 4.9% in April from 5.2% in March.
- Japan: The current account showed a surplus of 1.589 trillion yen in March, up from a surplus of Y1.177 trillion yen in February.
- China: The trade surplus for April amounted to $18.42 billion compared to expectations for a surplus of $7.93 billion. In March, the balance was in a surplus of $5.35 billion.
- Japan: The Eco Watchers Survey showed that the outlook for April improved to 50.9 from 49.3 in March.
- France: Manufacturing output increased 1.4% in March following a revised 0.9% drop in February.
- France: Business confidence remained unchanged at 95 in April.
- Italy: Industrial production increased 0.5% in March from February, when it fell 0.7%.
- United Kingdom: Industrial production fell 0.3% in March, reversing a 0.4% rise in February.
- United Kingdom: BoE will leave interest rates unchanged at 0.5% and the asset purchase facility at £325B.
Today's economic calendar
- United States: Jobless claims
- United States: Trade balance for March
- Canada: International merchandise trade for March
- Canada: New Housing Price Index for March
EUR – June
Luca Model: Short since May 7
The June euro opens on a weak note in an inside range after falling for two days and hitting a 3 ½-month low on Wednesday. Euro had closed down every day of last week and in two of this week's three days. It is holding well below the 21-day moving averages, so it's oversold.
The short-term outlook is sideways. The medium-term outlook turned bearish after the euro broke the bottom of a symmetrical triangle. My model is short.
Wednesday's low is 1.2913. The next floors are 1.2900 and 1.2835.
Initial resistance is at 1.3015. The next cap is 1.3070. The 21-day exponential moving average resists at 1.3120.
INDICATORS
Fast stochastics: Bearish
MACD: Bearish
Ichimoku: Bearish
OUTLOOK
NEAR-TERM: Sideways
MEDIUM-TERM: Bearish
LONG-TERM: Sideways
JPY – June
Luca Model: Long since March 21
The June Japanese yen is consolidating around the 100-day moving average after stretching to a 2 ½-month high on Wednesday. It remains in a channel rising since March 21.
The short-term outlook is sideways. The medium-term outlook is sideways and my model is long.
The 200-day moving average resists at 1.2598. Further resistance is at 1.2690.
Immediate support is at 1.2490. The 21-day exponential moving average supports at 1.2428.
INDICATORS
Fast stochastics: Bullish
MACD: Bullish
Ichimoku: Bullish
OUTLOOK
NEAR-TERM: Sideways
MEDIUM-TERM: Sideways
LONG-TERM: Bearish
GBP – June
Luca Model: Long since April 17
The June pound opens a little lower in the US after closing off a 2 1/2-week low on Wednesday. It had briefly penetrated the support of the 21-day exponential moving average. The pound had peaked at an eight-month high last Monday.
The short-term outlook is sideways. The medium-term outlook is slightly bullish and my model is long.
Initial support is at 1.6062. Further support is at 1.6035 and 1.5950.
Immediate resistance is at 1.6200. The top of the uptrend is 1.6298.
INDICATORS
Fast stochastics: Bearish
MACD: Slightly bearish
Ichimoku: Sideways
OUTLOOK
NEAR-TERM: Sideways
MEDIUM-TERM: Bullish
LONG-TERM: Sideways
CHF – June
Luca Model: Short since May 2
The June Swiss franc opens softly in an inside range after falling again and reaching a near two-month low on Wednesday. The franc peaked last Tuesday. It has been making a choppy upmove since April 16. It is trading below the 100-day exponential moving average. The franc trades in a symmetrical triangle.
The short-term outlook is sideways. The medium-term outlook is bullish and my model is long again.
Wednesday's low is 1.0754. A pivot low is 1.0725.
Initial resistance is at 1.0830. The next cap is 1.0880. The 21-day exponential moving average resists at 1.0922.
INDICATORS
Fast stochastics: Bearish
MACD: Bearish
Ichimoku: Slightly bearish
OUTLOOK
NEAR-TERM: Sideways
MEDIUM-TERM: Sideways
LONG-TERM: Sideways
CAD – June
Luca Model: Short since May 7 (reversing long since April 24)
The June Canadian dollar opens lower in an inside range and below the 200-day moving average after closing off a 3 ½-month low on Wednesday. It briefly broke the bottom of the channel rising since mid-December. It remains well below the 21-day exponential moving average. The loonie had put in a medium-term peak to on April 27.
The short-term outlook is sideways. The medium-term outlook is sideways and my model is short.
A pivot low is .9928. Further support is at .9807.
The 100-day moving average caps at .9996 and the 21-day moving average at 1.0056.
INDICATORS
Fast stochastics: Bearish
MACD: Bearish
Ichimoku: Slightly bearish
OUTLOOK
NEAR-TERM: Sideways
MEDIUM-TERM: Bullish
LONG-TERM: Slightly bullish
AUD – June
Luca Model: Short since April 30
The June Australian dollar is the exception to the rule and opens up in the US after sinking to the low of the year on Wednesday. It is trading well below the 200-day exponential moving average. The Aussie had peaked on the last day of February.
The short-term outlook is sideways to slightly bullish. The medium-term outlook is sideways and my model is long.
Initial resistance is at 1.0105. The 200-day moving average resists at 1.0173. The 21-day exponential moving average caps at a distant 1.0219.
The bottom of the downtrend is .9981. Further support is at .9920.
INDICATORS
Fast stochastics: Sideways
MACD: Bearish
Ichimoku: Bearish
OUTLOOK
NEAR-TERM: Sideways to slightly bullish
MEDIUM-TERM: Bearish
LONG-TERM: Sideways
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.
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