US FX
The appetite for risk declined ahead of the US open after improving on Monday and overnight in Asia. The foreign currencies open lower or off their early highs after most of them retained some of their gains on Monday. These currencies are oversold, but a further recovery today is now in doubt. Monday's recovery was temporary because of the persistent weakness in the US, the Eurozone peripherals and now in China. The Asian and European markets advanced, but the US markets will open lower.
The short-term outlook is sideways to slightly bearish for all the foreign currencies – unless the stock markets reverse up. The medium-term outlook for most of the foreign currencies is sideways. The LGR short-term model is short on the European and commodity currencies.
Good luck!
www.lucafxta.com
Overnight
Today's economic calendar
EUR – June
Luca Model: Short since May 7
The oversold June euro opens lower in an inside range in the US after climbing to a four-day high on Monday and reversing from a four-month low on Friday. It has been falling nearly every day since peaking on May 1. The euro broke below the bottom of a medium-term declining channel on Tuesday. It is holding well below the 21-day moving averages, so it's oversold.
The short-term outlook turned prematurely sideways to slightly bearish. The medium-term outlook is bearish and my model is short.
Initial support is at 1.2750. Friday's low is 1.2644.
Immediate resistance is at 1.2825. The next resistance is 1.2890. The 21-day moving average caps at 1.2935.
INDICATORS
Fast stochastics: Bullish
MACD: Bearish
Ichimoku: Bearish
OUTLOOK
NEAR-TERM: Sideways to slightly bearish
MEDIUM-TERM: Bearish
LONG-TERM: Sideways
JPY – June
Luca Model: Long since March 21
The June Japanese yen opens at a three-day low and below the 200-day moving average in the US after edging lower on Monday and peaking at a three-month high on Friday. It is trading in the channel rising since March 20.
The short-term outlook is sideways to slightly bearish. The medium-term outlook is sideways and my model is long.
Immediate support is at 1.2525. The 21-day moving average follows at 1.2494. Further support is at 1.2385.
Initial resistance is at 1.2663. Further resistance is at 1.2805.
INDICATORS
Fast stochastics: Bearish
MACD: Sideways
Ichimoku: Sideways
OUTLOOK
NEAR-TERM: Sideways to slightly bearish
MEDIUM-TERM: Sideways
LONG-TERM: Bearish
GBP – June
Luca Model: Short May 15
The oversold June pound fell from a three-day high and opens lower in the US. It remains well below the 55-day and 21-day exponential moving averages. The pound had peaked at an eight-month high on April 30 and is now challenging the bottom of a channel rising since January.
The short-term outlook is sideways to slightly bearish. The medium-term outlook is slightly bullish but my model is short.
Friday's low is 1.5730. Distant support is at 1.5590.
The 200-day moving average resists at 1.5864, the 55–day moving average at 1.5955, and the 21-day moving average at 1.5989.
INDICATORS
Fast stochastics: Slightly bearish
MACD: Bearish
Ichimoku: Bearish
OUTLOOK
NEAR-TERM: Sideways to slightly bearish
MEDIUM-TERM: Bullish
LONG-TERM: Sideways
CHF – June
Luca Model: Short since May 2
The oversold June Swiss franc opens lower in an inside range in the US after rising to a four-day high on Monday and reversing from a four-month low on Friday. It has fallen unevenly since peaking on May 1. It is trading well below the 21-day exponential moving average. The franc trades at the bottom of a wide channel declining since the end of February.
The short-term outlook is sideways to slightly bearish. The medium-term outlook is bearish and my model is short.
Immediate support is at 1.0600. Friday's low is 1.0530. Distant support is at 1.0480.
Initial resistance is at 1.0675. The 21-day moving average caps 1.0769.
INDICATORS
Fast stochastics: Slightly bullish
MACD: Bearish
Ichimoku: Slightly bearish
OUTLOOK
NEAR-TERM: Sideways to slightly bearish
MEDIUM-TERM: Bearish
LONG-TERM: Sideways
CAD – June
Luca Model: Short since May 7
The oversold June Canadian dollar opens off its overnight highs in the US after reversing from a four-month low on Monday. The loonie has been under pressure since trading below the bottom of the channel rising since mid-December. The loonie peaked on April 27.
The short-term outlook is sideways. The medium-term outlook is sideways and my model is short.
Initial support is at .9765. Further support is at .9690.
Immediate resistance is at .9845. The next cap is at .9910. The 21-day moving average caps at .9953.
INDICATORS
Fast stochastics: Slightly bullish
MACD: Bearish
Ichimoku: Slightly bearish
OUTLOOK
NEAR-TERM: Sideways
MEDIUM-TERM: Sideways
LONG-TERM: Slightly bullish
AUD – June
Luca Model: Short since April 30
The oversold June Australian dollar fell from a three-day high and opens lower in the US after advancing on Monday and falling to a five-month low on Friday. It has fallen for most of May. It is trading well below the 200-day exponential moving average. The Aussie had peaked on the last day of February and is trading below the bottom of its declining channel.
The short-term outlook is sideways to slightly bearish. The medium-term outlook is sideways and my model is short.
Friday's low is .9766. Further support is at .9716.
Initial resistance is at .9909. The next cap is 1.0000. The 21-day exponential moving average caps at 1.0037.
INDICATORS
Fast stochastics: Slightly bullish
MACD: Bearish
Ichimoku: Bearish
OUTLOOK
NEAR-TERM: Sideways to slightly bearish
MEDIUM-TERM: Bearish
LONG-TERM: Sideways
View All Market Commentary
The short-term outlook is sideways to slightly bearish for all the foreign currencies – unless the stock markets reverse up. The medium-term outlook for most of the foreign currencies is sideways. The LGR short-term model is short on the European and commodity currencies.
Good luck!
www.lucafxta.com
Overnight
- China: The leading economic index increased 0.8% in April, following a 0.8% rise in March.
- Japan: Fitch Ratings trimmed Japan's credit ratings on Tuesday, citing growing risks to credit profile as a result of high and increasing public debt ratios.
- United Kingdom: Policymakers can consider further monetary easing as anemic nominal wage growth and broadly stable inflation expectations suggest weak underlying inflationary pressure, the International Monetary Fund said.
- United Kingdom: Consumer Price Index doubled to 0.6% in April from 0.3% in March.
- United Kingdom: The DCLG House Price Index 0.4% fell year-on-year in March after rising 1% in February.
- United Kingdom: Public sector net borrowing showed a surplus of GBP 16.5 billion in April.
Today's economic calendar
- United States: Existing home sales for April
EUR – June
Luca Model: Short since May 7
The oversold June euro opens lower in an inside range in the US after climbing to a four-day high on Monday and reversing from a four-month low on Friday. It has been falling nearly every day since peaking on May 1. The euro broke below the bottom of a medium-term declining channel on Tuesday. It is holding well below the 21-day moving averages, so it's oversold.
The short-term outlook turned prematurely sideways to slightly bearish. The medium-term outlook is bearish and my model is short.
Initial support is at 1.2750. Friday's low is 1.2644.
Immediate resistance is at 1.2825. The next resistance is 1.2890. The 21-day moving average caps at 1.2935.
INDICATORS
Fast stochastics: Bullish
MACD: Bearish
Ichimoku: Bearish
OUTLOOK
NEAR-TERM: Sideways to slightly bearish
MEDIUM-TERM: Bearish
LONG-TERM: Sideways
JPY – June
Luca Model: Long since March 21
The June Japanese yen opens at a three-day low and below the 200-day moving average in the US after edging lower on Monday and peaking at a three-month high on Friday. It is trading in the channel rising since March 20.
The short-term outlook is sideways to slightly bearish. The medium-term outlook is sideways and my model is long.
Immediate support is at 1.2525. The 21-day moving average follows at 1.2494. Further support is at 1.2385.
Initial resistance is at 1.2663. Further resistance is at 1.2805.
INDICATORS
Fast stochastics: Bearish
MACD: Sideways
Ichimoku: Sideways
OUTLOOK
NEAR-TERM: Sideways to slightly bearish
MEDIUM-TERM: Sideways
LONG-TERM: Bearish
GBP – June
Luca Model: Short May 15
The oversold June pound fell from a three-day high and opens lower in the US. It remains well below the 55-day and 21-day exponential moving averages. The pound had peaked at an eight-month high on April 30 and is now challenging the bottom of a channel rising since January.
The short-term outlook is sideways to slightly bearish. The medium-term outlook is slightly bullish but my model is short.
Friday's low is 1.5730. Distant support is at 1.5590.
The 200-day moving average resists at 1.5864, the 55–day moving average at 1.5955, and the 21-day moving average at 1.5989.
INDICATORS
Fast stochastics: Slightly bearish
MACD: Bearish
Ichimoku: Bearish
OUTLOOK
NEAR-TERM: Sideways to slightly bearish
MEDIUM-TERM: Bullish
LONG-TERM: Sideways
CHF – June
Luca Model: Short since May 2
The oversold June Swiss franc opens lower in an inside range in the US after rising to a four-day high on Monday and reversing from a four-month low on Friday. It has fallen unevenly since peaking on May 1. It is trading well below the 21-day exponential moving average. The franc trades at the bottom of a wide channel declining since the end of February.
The short-term outlook is sideways to slightly bearish. The medium-term outlook is bearish and my model is short.
Immediate support is at 1.0600. Friday's low is 1.0530. Distant support is at 1.0480.
Initial resistance is at 1.0675. The 21-day moving average caps 1.0769.
INDICATORS
Fast stochastics: Slightly bullish
MACD: Bearish
Ichimoku: Slightly bearish
OUTLOOK
NEAR-TERM: Sideways to slightly bearish
MEDIUM-TERM: Bearish
LONG-TERM: Sideways
CAD – June
Luca Model: Short since May 7
The oversold June Canadian dollar opens off its overnight highs in the US after reversing from a four-month low on Monday. The loonie has been under pressure since trading below the bottom of the channel rising since mid-December. The loonie peaked on April 27.
The short-term outlook is sideways. The medium-term outlook is sideways and my model is short.
Initial support is at .9765. Further support is at .9690.
Immediate resistance is at .9845. The next cap is at .9910. The 21-day moving average caps at .9953.
INDICATORS
Fast stochastics: Slightly bullish
MACD: Bearish
Ichimoku: Slightly bearish
OUTLOOK
NEAR-TERM: Sideways
MEDIUM-TERM: Sideways
LONG-TERM: Slightly bullish
AUD – June
Luca Model: Short since April 30
The oversold June Australian dollar fell from a three-day high and opens lower in the US after advancing on Monday and falling to a five-month low on Friday. It has fallen for most of May. It is trading well below the 200-day exponential moving average. The Aussie had peaked on the last day of February and is trading below the bottom of its declining channel.
The short-term outlook is sideways to slightly bearish. The medium-term outlook is sideways and my model is short.
Friday's low is .9766. Further support is at .9716.
Initial resistance is at .9909. The next cap is 1.0000. The 21-day exponential moving average caps at 1.0037.
INDICATORS
Fast stochastics: Slightly bullish
MACD: Bearish
Ichimoku: Bearish
OUTLOOK
NEAR-TERM: Sideways to slightly bearish
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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