Asia FX
The appetite for risk failed its early attempt to return on Tuesday, as fears about the deteriorating situation in the Eurozone and of economic slowdown in China will not evaporate easily. Greece is looking for another government election and political talks failed in customary fashion. Eurozone officials dismissed once again calls for expulsion of Greece from the union, so the kabuki continues.
All major foreign currencies buckled again, as the European and commodity currencies have fallen for more than two weeks. Even the pound slipped after recovering on Monday, as the one major European currency that was unaffected by the Eurozone peripherals. The US indexes bounced briefly but closed down. The DJI is trading below the neckline of a double top and the EUR/JPY is on its way to the target of a head and shoulders pattern in the 100 area. Gold and oil fell as well.
The short-term outlook is sideways to slightly bearish for the European and commodity currencies. 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 had a topsy-turvy day of trading, but when the dust settled, it ended at a four-month low on Tuesday. It has been falling nearly every day since peaking on May 1. The euro is broke and closed below the bottom of a medium-term declining channel. It is holding well below the 21-day moving averages, so it's oversold.
The short-term outlook is sideways to slightly bearish. The medium-term outlook is bearish and my model is short.
Initial support is 1.2645. The next floor is 1.2535.
Immediate resistance is at 1.2790. The next caps are 1.2905 and 1.2995.
INDICATORS
Fast stochastics: Bearish
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 fell to an 11-day low and below the 100-day moving average on Tuesday. The yen had peaked at a 2 ½-month high last Wednesday but closed below the channel rising since March 21.
The short-term outlook is sideways to slightly bearish. The medium-term outlook is sideways and my model is long.
The 21-day exponential moving average supports at 1.2443. Further support is at 1.2375.
The 100-day moving average resists at 1.2509 and the 200-day moving average at 1.2595.
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 (reversing long since April 17)
The June pound so lumped to a four-week low on Tuesday after reversing from a 24-day low on Monday. It remains below the 21-day exponential moving average. The pound had peaked at an eight-month high on April 30.
The short-term outlook is sideways to slightly bearish. The medium-term outlook is slightly bullish and my model is short.
The 55-day moving average supports at 1.5982. Further support is at 1.5905.
The 21-day moving average caps at 1.6095. Further resistance is at 1.6140 and 1.6195.
INDICATORS
Fast stochastics: Bearish
MACD: Bearish
Ichimoku: Slightly bearish
OUTLOOK
NEAR-TERM: Sideways to slightly bearish
MEDIUM-TERM: Bullish
LONG-TERM: Sideways
CHF – June
Luca Model: Short since May 2
The June Swiss franc reversed early gains and collapsed to a four-month low on Tuesday after falling unevenly since peaking on May 1. It is trading well 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 bearish and my model is short.
Support is at 1.0560. Further support is at 1.0480.
Initial resistance is at 1.0680. The next caps are 1.0745 and 1.0815. The 21-day exponential moving average resists at a distant 1.0863.
INDICATORS
Fast stochastics: Bearish
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 June Canadian dollar ended lower on Tuesday and remains in an inside range. It is trading below the bottom of the channel rising since mid-December. The loonie had put in a medium-term peak to on April 27.
The short-term outlook is sideways to slightly bearish. The medium-term outlook is sideways and my model is short.
A pivot low is .9910. Further support is at .9807.
The 100-day moving average caps at .9994 and the 21-day moving average at 1.0035.
INDICATORS
Fast stochastics: Slightly bearish
MACD: Bearish
Ichimoku: Slightly bearish
OUTLOOK
NEAR-TERM: Sideways to slightly bearish
MEDIUM-TERM: Sideways
LONG-TERM: Slightly bullish
AUD – June
Luca Model: Short since April 30
The June Australian dollar closed at a five-month low on Tuesday after failing its early bounce. It had fallen in all but two days in May. It is trading well below the 200-day exponential moving average. The Aussie had peaked on the last day of February and is testing 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.
Immediate support is at .9865. Further support is at .9825.
Initial resistance is at 1.0000. The next cap is 1.0080. The 21-day exponential moving average caps at a distant 1.0150.
INDICATORS
Fast stochastics: Bearish
MACD: Bearish
Ichimoku: Bearish
OUTLOOK
NEAR-TERM: Sideways to slightly bearish
MEDIUM-TERM: Bearish
LONG-TERM: Sideways
View All Market Commentary
All major foreign currencies buckled again, as the European and commodity currencies have fallen for more than two weeks. Even the pound slipped after recovering on Monday, as the one major European currency that was unaffected by the Eurozone peripherals. The US indexes bounced briefly but closed down. The DJI is trading below the neckline of a double top and the EUR/JPY is on its way to the target of a head and shoulders pattern in the 100 area. Gold and oil fell as well.
The short-term outlook is sideways to slightly bearish for the European and commodity currencies. 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
- US: The retail sales edged up by 0.1% in April following a revised 0.7% increase in March.
- US: CPI was flat in April after rising 0.3% in March. The core CPI was up 0.2%, the same as in March.
- US: NY Empire State Manufacturing Index rose to 17.09 in May from 6.56 in April.
- US: Net long-term TIC flows rose to $36.2 billion in March from $10.1 billion in February. The total net TIC flows declined $49.9 billion in March after expanding $107.7 billion in February.
- US: Business inventories rose by 0.3% in March following a 0.6% increase in February. Business sales increased by 0.6% in March after climbing by 0.7% in the previous month.
- US: The NAHB/Wells Fargo Housing Market Index jumped to 29 in May from a downwardly revised 24 in April.
Today's economic calendar
- Japan: Machinery Orders for March
- Japan: Tertiary Industry Index for March
- Australia: Wage Price Index for the first quarter
- Australia: Westpac consumer confidence for May
EUR – June
Luca Model: Short since May 7
The June euro had a topsy-turvy day of trading, but when the dust settled, it ended at a four-month low on Tuesday. It has been falling nearly every day since peaking on May 1. The euro is broke and closed below the bottom of a medium-term declining channel. It is holding well below the 21-day moving averages, so it's oversold.
The short-term outlook is sideways to slightly bearish. The medium-term outlook is bearish and my model is short.
Initial support is 1.2645. The next floor is 1.2535.
Immediate resistance is at 1.2790. The next caps are 1.2905 and 1.2995.
INDICATORS
Fast stochastics: Bearish
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 fell to an 11-day low and below the 100-day moving average on Tuesday. The yen had peaked at a 2 ½-month high last Wednesday but closed below the channel rising since March 21.
The short-term outlook is sideways to slightly bearish. The medium-term outlook is sideways and my model is long.
The 21-day exponential moving average supports at 1.2443. Further support is at 1.2375.
The 100-day moving average resists at 1.2509 and the 200-day moving average at 1.2595.
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 (reversing long since April 17)
The June pound so lumped to a four-week low on Tuesday after reversing from a 24-day low on Monday. It remains below the 21-day exponential moving average. The pound had peaked at an eight-month high on April 30.
The short-term outlook is sideways to slightly bearish. The medium-term outlook is slightly bullish and my model is short.
The 55-day moving average supports at 1.5982. Further support is at 1.5905.
The 21-day moving average caps at 1.6095. Further resistance is at 1.6140 and 1.6195.
INDICATORS
Fast stochastics: Bearish
MACD: Bearish
Ichimoku: Slightly bearish
OUTLOOK
NEAR-TERM: Sideways to slightly bearish
MEDIUM-TERM: Bullish
LONG-TERM: Sideways
CHF – June
Luca Model: Short since May 2
The June Swiss franc reversed early gains and collapsed to a four-month low on Tuesday after falling unevenly since peaking on May 1. It is trading well 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 bearish and my model is short.
Support is at 1.0560. Further support is at 1.0480.
Initial resistance is at 1.0680. The next caps are 1.0745 and 1.0815. The 21-day exponential moving average resists at a distant 1.0863.
INDICATORS
Fast stochastics: Bearish
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 June Canadian dollar ended lower on Tuesday and remains in an inside range. It is trading below the bottom of the channel rising since mid-December. The loonie had put in a medium-term peak to on April 27.
The short-term outlook is sideways to slightly bearish. The medium-term outlook is sideways and my model is short.
A pivot low is .9910. Further support is at .9807.
The 100-day moving average caps at .9994 and the 21-day moving average at 1.0035.
INDICATORS
Fast stochastics: Slightly bearish
MACD: Bearish
Ichimoku: Slightly bearish
OUTLOOK
NEAR-TERM: Sideways to slightly bearish
MEDIUM-TERM: Sideways
LONG-TERM: Slightly bullish
AUD – June
Luca Model: Short since April 30
The June Australian dollar closed at a five-month low on Tuesday after failing its early bounce. It had fallen in all but two days in May. It is trading well below the 200-day exponential moving average. The Aussie had peaked on the last day of February and is testing 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.
Immediate support is at .9865. Further support is at .9825.
Initial resistance is at 1.0000. The next cap is 1.0080. The 21-day exponential moving average caps at a distant 1.0150.
INDICATORS
Fast stochastics: Bearish
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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