Asia FX
The foreign currencies open divergently in the Far East on Monday along the same lines they ended on Friday. The main themes of weakness remain in place: the US, the Eurozone peripherals and even China. At the weekend, the Group of 8 leaders emphasized both growth and fiscal discipline, pleading for Greece to stay in the Eurozone and the European Union. Clearly, it's not Greece's presence in the zone that matters, but the negative impact of its more than deserved departure on the weakened banks in Spain and Italy. Therefore, Greece stands to get away with their debt while making no real changes.
While the European currencies are recovering, the commodity currencies are sinking even deeper. These currencies are oversold, so some could see a further recovery today. Meanwhile, EUR/JPY reached the target of a head and shoulders pattern in the 100 area.
The short-term outlook is slightly bullish for the European currencies and yen, and slightly bearish for the commodity currencies. Calibrate this forecast with the performance of the stock indexes. 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 up in the Far East after 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 is slightly bullish. The medium-term outlook is bearish and my model is short.
Immediate resistance is at 1.2795. The next caps are 1.2785 and 1.2905.
Friday's low is 1.2644. The next floor is 1.2535.
INDICATORS
Fast stochastics: Bullish
MACD: Bearish
Ichimoku: Bearish
OUTLOOK
NEAR-TERM: Slightly bullish
MEDIUM-TERM: Bearish
LONG-TERM: Sideways
JPY – June
Luca Model: Long since March 21
The June Japanese yen opens little changed in Asia after soaring to a three-month high on Friday. It is trading in the channel rising since March 20.
The short-term outlook is sideways to slightly bullish. The medium-term outlook is sideways and my model is long.
Initial resistance is at 1.2685. Further resistance is at 1.2805.
The 200-day moving average at 1.2595 and the 21-day moving average supports at 1.2492.
INDICATORS
Fast stochastics: Bullish
MACD: Sideways
Ichimoku: Sideways
OUTLOOK
NEAR-TERM: Sideways to slightly bullish
MEDIUM-TERM: Sideways
LONG-TERM: Bearish
GBP – June
Luca Model: Short May 15
The oversold June pound opens little changed in the Far East after recovering from a two-month low on Friday. 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 bullish. The medium-term outlook is slightly bullish and my model is short.
The 200-day moving average resists at 1.5865, the 55–day moving average at 1.5962, and the 21-day moving average at 1.6010.
Friday's low is 1.5730. Further support is at 1.5590.
INDICATORS
Fast stochastics: sideways
MACD: Bearish
Ichimoku: Bearish
OUTLOOK
NEAR-TERM: Sideways to slightly bullish
MEDIUM-TERM: Bullish
LONG-TERM: Sideways
CHF – June
Luca Model: Short since May 2
The oversold June Swiss franc opens up in Asia after 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 slightly bullish. The medium-term outlook is bearish and my model is short.
Initial resistance is at 1.0655. The next caps are at 1.0680 and 1.0745.
Friday's low is 1.0530. Further support is at 1.0480.
INDICATORS
Fast stochastics: Slightly bullish
MACD: Bearish
Ichimoku: Slightly bearish
OUTLOOK
NEAR-TERM: Slightly bullish
MEDIUM-TERM: Bearish
LONG-TERM: Sideways
CAD – June
Luca Model: Short since May 7
The oversold June Canadian dollar opens near a four-month low in the Far East after sinking all last week. 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 slightly bearish. 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 .9825. The next cap is at .9910. The 21-day moving average caps at .9964.
INDICATORS
Fast stochastics: Bearish
MACD: Bearish
Ichimoku: Slightly bearish
OUTLOOK
NEAR-TERM: Slightly bearish
MEDIUM-TERM: Sideways
LONG-TERM: Slightly bullish
AUD – June
Luca Model: Short since April 30
The oversold June Australian dollar opens near a five-month low in Asia. 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 slightly bearish. The medium-term outlook is sideways and my model is short.
Initial support is at .9765. Further support is at .9716.
Initial resistance is at .9870. The next caps are .9935 and 1.0000. The 21-day exponential moving average caps at a distant 1.0053.
INDICATORS
Fast stochastics: Bearish
MACD: Bearish
Ichimoku: Bearish
OUTLOOK
NEAR-TERM: Slightly bearish
MEDIUM-TERM: Bearish
LONG-TERM: Sideways
View All Market Commentary
While the European currencies are recovering, the commodity currencies are sinking even deeper. These currencies are oversold, so some could see a further recovery today. Meanwhile, EUR/JPY reached the target of a head and shoulders pattern in the 100 area.
The short-term outlook is slightly bullish for the European currencies and yen, and slightly bearish for the commodity currencies. Calibrate this forecast with the performance of the stock indexes. 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
- Canada: Consumer Price Index rose 0.3% in April and 2.0% on a yearly basis.
Today's economic calendar
- Japan: All Industry Activity Index for March
- Japan: Leading Economic Index / Coincident Index for March
EUR – June
Luca Model: Short since May 7
The oversold June euro opens up in the Far East after 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 is slightly bullish. The medium-term outlook is bearish and my model is short.
Immediate resistance is at 1.2795. The next caps are 1.2785 and 1.2905.
Friday's low is 1.2644. The next floor is 1.2535.
INDICATORS
Fast stochastics: Bullish
MACD: Bearish
Ichimoku: Bearish
OUTLOOK
NEAR-TERM: Slightly bullish
MEDIUM-TERM: Bearish
LONG-TERM: Sideways
JPY – June
Luca Model: Long since March 21
The June Japanese yen opens little changed in Asia after soaring to a three-month high on Friday. It is trading in the channel rising since March 20.
The short-term outlook is sideways to slightly bullish. The medium-term outlook is sideways and my model is long.
Initial resistance is at 1.2685. Further resistance is at 1.2805.
The 200-day moving average at 1.2595 and the 21-day moving average supports at 1.2492.
INDICATORS
Fast stochastics: Bullish
MACD: Sideways
Ichimoku: Sideways
OUTLOOK
NEAR-TERM: Sideways to slightly bullish
MEDIUM-TERM: Sideways
LONG-TERM: Bearish
GBP – June
Luca Model: Short May 15
The oversold June pound opens little changed in the Far East after recovering from a two-month low on Friday. 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 bullish. The medium-term outlook is slightly bullish and my model is short.
The 200-day moving average resists at 1.5865, the 55–day moving average at 1.5962, and the 21-day moving average at 1.6010.
Friday's low is 1.5730. Further support is at 1.5590.
INDICATORS
Fast stochastics: sideways
MACD: Bearish
Ichimoku: Bearish
OUTLOOK
NEAR-TERM: Sideways to slightly bullish
MEDIUM-TERM: Bullish
LONG-TERM: Sideways
CHF – June
Luca Model: Short since May 2
The oversold June Swiss franc opens up in Asia after 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 slightly bullish. The medium-term outlook is bearish and my model is short.
Initial resistance is at 1.0655. The next caps are at 1.0680 and 1.0745.
Friday's low is 1.0530. Further support is at 1.0480.
INDICATORS
Fast stochastics: Slightly bullish
MACD: Bearish
Ichimoku: Slightly bearish
OUTLOOK
NEAR-TERM: Slightly bullish
MEDIUM-TERM: Bearish
LONG-TERM: Sideways
CAD – June
Luca Model: Short since May 7
The oversold June Canadian dollar opens near a four-month low in the Far East after sinking all last week. 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 slightly bearish. 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 .9825. The next cap is at .9910. The 21-day moving average caps at .9964.
INDICATORS
Fast stochastics: Bearish
MACD: Bearish
Ichimoku: Slightly bearish
OUTLOOK
NEAR-TERM: Slightly bearish
MEDIUM-TERM: Sideways
LONG-TERM: Slightly bullish
AUD – June
Luca Model: Short since April 30
The oversold June Australian dollar opens near a five-month low in Asia. 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 slightly bearish. The medium-term outlook is sideways and my model is short.
Initial support is at .9765. Further support is at .9716.
Initial resistance is at .9870. The next caps are .9935 and 1.0000. The 21-day exponential moving average caps at a distant 1.0053.
INDICATORS
Fast stochastics: Bearish
MACD: Bearish
Ichimoku: Bearish
OUTLOOK
NEAR-TERM: 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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