Asia FX
The appetite for risk was arrested on Wednesday by concern other the fortunes of the US economy and the Eurozone reaction to the Greek shenanigans. The Fed's latest meeting minutes showed that a couple of policymakers favored of further quantitative easing if the economy falters. Meanwhile, there were conflicting reports that the ECB has halted monetary policy operations to certain Greece banks or is only considering freezing assets unless the government speeds up the process of recapitalizing the lenders.
The oversold euro and franc ended with small losses after bouncing slightly from new lows of the downtrend, but the pound and commodity currencies retained losses.
The US indexes fell. Gold and oil also 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.
The short-term outlook is sideways to slightly bearish for all foreign currencies. 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 June euro fell further to a four-month low on Wednesday after accelerating its losses on Tuesday. 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 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 1.2785. 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 sank further on Wednesday, but recovered most of these losses on the close after falling below the 100-day moving average on Tuesday and below the channel rising since March 20. 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.
Initial support is at 1.2420. Further support is at 1.2375 and 1.2240.
The 100-day moving average resists at 1.2506 and the 200-day moving average at 1.2592.
INDICATORS
Fast stochastics: Bearish
MACD: Slightly bearish
Ichimoku: Sideways
OUTLOOK
NEAR-TERM: Sideways to slightly bearish
MEDIUM-TERM: Sideways
LONG-TERM: Bearish
GBP – June
Luca Model: Short May 15
The June pound fell further to at a one-month low on Wednesday. It remains below the 21-day and 55-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 and my model is short.
Immediate support is at 1.5865. Further support is at 1.5775.
The 55–day moving average caps at 1.5980 and the 21-day moving average at 1.6078. Further resistance is at 1.6140 and 1.6195.
INDICATORS
Fast stochastics: 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 June Swiss franc fell further to a four-month low after falling unevenly since peaking on May 1. It is trading well below the 21-day exponential moving average. The franc trades in 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.
Support is at 1.0560. Further support is at 1.0480.
Initial resistance is at 1.0680. The next cap is at 1.0745. The 21-day exponential moving average resists at a distant 1.0838.
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 dropped to a four-month low on Wednesday after ending lower on Tuesday. The loonie remains in an inside range. It is trading below the bottom of the channel rising since mid-December. The loonie peaked on April 27.
The short-term outlook is sideways to slightly bearish. The medium-term outlook is sideways and my model is short.
Wednesday's low is .9864. Further support is at .9807.
The 200-day moving average caps at .9973 and the 21-day moving average at 1.0019.
INDICATORS
Fast stochastics: 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 fell to a five-month low on Wednesday. It has 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 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.
Wednesday's low is .9838. Further support is at .9804 and .9716.
Initial resistance is at .9935. The next caps are 1.0000 and 1.0080. The 21-day exponential moving average caps at 1.0125.
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
The oversold euro and franc ended with small losses after bouncing slightly from new lows of the downtrend, but the pound and commodity currencies retained losses.
The US indexes fell. Gold and oil also 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.
The short-term outlook is sideways to slightly bearish for all foreign currencies. 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
- US: Housing starts increased 2.6% to a seasonally adjusted annual rate of 717,000 units in April. March's starts were revised up to a 699,000-unit pace from a previously reported 654,000 unit rate. Permits slumped 7% to 715,000 and March's permits were revised to a 769,000-unit rate.
- US: Industrial production increased by 1.1% in April after falling by 0.6% in March. Capacity utilization rose to 79.2% in April from a revised 78.4% in March.
- US: The Fed Minutes of its April 24-25 meeting confirmed that the Fed promised to keep interest rates low at least through late 2014, but offered no further accommodation in support of the sluggish economy. "Several" voting members are in favor of additional asset purchases if the economic recovery falters, up from language in the previous months indicating "a few" potential advocates for QE3.
- Canada: Manufacturing shipments rose 1.9% in March after contacting 0.2% in February.
Today's economic calendar
- Australia: Consumer inflation expectations for May
- Japan: Industrial production for March
- Japan: Gross Domestic Product for the first quarter
EUR – June
Luca Model: Short since May 7
The June euro fell further to a four-month low on Wednesday after accelerating its losses on Tuesday. 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 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 1.2785. 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 sank further on Wednesday, but recovered most of these losses on the close after falling below the 100-day moving average on Tuesday and below the channel rising since March 20. 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.
Initial support is at 1.2420. Further support is at 1.2375 and 1.2240.
The 100-day moving average resists at 1.2506 and the 200-day moving average at 1.2592.
INDICATORS
Fast stochastics: Bearish
MACD: Slightly bearish
Ichimoku: Sideways
OUTLOOK
NEAR-TERM: Sideways to slightly bearish
MEDIUM-TERM: Sideways
LONG-TERM: Bearish
GBP – June
Luca Model: Short May 15
The June pound fell further to at a one-month low on Wednesday. It remains below the 21-day and 55-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 and my model is short.
Immediate support is at 1.5865. Further support is at 1.5775.
The 55–day moving average caps at 1.5980 and the 21-day moving average at 1.6078. Further resistance is at 1.6140 and 1.6195.
INDICATORS
Fast stochastics: 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 June Swiss franc fell further to a four-month low after falling unevenly since peaking on May 1. It is trading well below the 21-day exponential moving average. The franc trades in 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.
Support is at 1.0560. Further support is at 1.0480.
Initial resistance is at 1.0680. The next cap is at 1.0745. The 21-day exponential moving average resists at a distant 1.0838.
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 dropped to a four-month low on Wednesday after ending lower on Tuesday. The loonie remains in an inside range. It is trading below the bottom of the channel rising since mid-December. The loonie peaked on April 27.
The short-term outlook is sideways to slightly bearish. The medium-term outlook is sideways and my model is short.
Wednesday's low is .9864. Further support is at .9807.
The 200-day moving average caps at .9973 and the 21-day moving average at 1.0019.
INDICATORS
Fast stochastics: 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 fell to a five-month low on Wednesday. It has 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 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.
Wednesday's low is .9838. Further support is at .9804 and .9716.
Initial resistance is at .9935. The next caps are 1.0000 and 1.0080. The 21-day exponential moving average caps at 1.0125.
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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