Asia FX
The appetite for risk remains extremely limited by the deteriorating situation in the Eurozone and the fragility of the US economic recovery. The French President-elect has yet to lock horns with the significantly more seasoned German Chancellor on the fortune of the already agreed austerity measures. In the interim, the peripherals' volcano is smothering under a false sense of equilibrium. It will surely erupt, but unfortunately one cannot forecast the timing. The upcoming ideological conflict between Germany and France only encourages Greece, the weakest of the lot, to disregard the terms of its rescue from financial bankruptcy. You should recall my repeated warnings that Greece might accept the harsh terms of its creditors with the hidden plan of changing its government and reneging on its previous commitments; well, so far, so good.
The adversity to risk is well illustrated by the sliding EUR/JPY, now at a nearly three-month low. The cross is tanking in line with the Bund-JGB yield spread and its bearish flag is targeting the 100 area. The European and commodity currencies are under various degrees of weakness, while the yen is flourishing further. The US equity indexes, oil and gold closed down, as expected.
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 fell for a second day on Wednesday, hitting a 3 ½-month low. Euro had closed down every day of last week. 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 1.3138.
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 extended its consolidation around the 100-day moving average but still managed to stretch to a 2 ½-month high. 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 1.2415.
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 ended off a 2 1/2-week low on Wednesday and 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.
The 21-day exponential moving average supports at 1.6104. 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 fell again on Wednesday and reached a near two-month low. 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 1.0936.
INDICATORS
Fast stochastics: Slightly 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 closed off a 3 ½-month low and below the 200-day moving average 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 1.9996 and the 21-day moving average at 1.0065.
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 sank to the low of the year, extending losses since April 30. 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. The medium-term outlook is sideways and my model is long.
Immediate support is at .9981. Further support is at .9920.
Initial resistance is at 1.0105. The 200-day moving average resists at 1.0174. The 21-day exponential moving average caps at a distant 1.0235.
INDICATORS
Fast stochastics: Bearish
MACD: Bearish
Ichimoku: Bearish
OUTLOOK
NEAR-TERM: Sideways
MEDIUM-TERM: Bearish
LONG-TERM: Sideways
View All Market Commentary
The adversity to risk is well illustrated by the sliding EUR/JPY, now at a nearly three-month low. The cross is tanking in line with the Bund-JGB yield spread and its bearish flag is targeting the 100 area. The European and commodity currencies are under various degrees of weakness, while the yen is flourishing further. The US equity indexes, oil and gold closed down, as expected.
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
- United States: Wholesale inventories rose 0.3% in March
Today's economic calendar
- China: Trade balance for April
- Australia: Unemployment rate for April
- Japan: Current account for March
- Japan: Eco Watchers Survey for April
EUR – June
Luca Model: Short since May 7
The June euro fell for a second day on Wednesday, hitting a 3 ½-month low. Euro had closed down every day of last week. 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 1.3138.
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 extended its consolidation around the 100-day moving average but still managed to stretch to a 2 ½-month high. 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 1.2415.
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 ended off a 2 1/2-week low on Wednesday and 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.
The 21-day exponential moving average supports at 1.6104. 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 fell again on Wednesday and reached a near two-month low. 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 1.0936.
INDICATORS
Fast stochastics: Slightly 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 closed off a 3 ½-month low and below the 200-day moving average 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 1.9996 and the 21-day moving average at 1.0065.
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 sank to the low of the year, extending losses since April 30. 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. The medium-term outlook is sideways and my model is long.
Immediate support is at .9981. Further support is at .9920.
Initial resistance is at 1.0105. The 200-day moving average resists at 1.0174. The 21-day exponential moving average caps at a distant 1.0235.
INDICATORS
Fast stochastics: Bearish
MACD: Bearish
Ichimoku: Bearish
OUTLOOK
NEAR-TERM: Sideways
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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