Forex Special - The European and commodity currencies consolidated in the Far East after the European and commodity currencies were hurt by Federal Reserve Chairman Bernanke’s testimony to Congress that the economic outlook remains "unusually uncertain" and that the central bank is ready to take new steps to keep the recovery alive if the economy worsens. The Asia/Pacific stock markets and the gold/oil spread are down.
The short-term outlook is sideways to slightly bearish for the European and commodity currencies and mildly bullish for the yen. The medium-term outlook is sideways for most of the foreign currencies futures. My model is short all of the major currencies but the yen.
This analysis is based on my books, as follows:
“Trading in the Global Currency Markets” - Prentice Hall Press, 3rd edition 2007
“Technical Analysis Applications” - McGraw-Hill, 2004
Overnight:
• Australia: No data
• Japan: All industry activity index for May
Today’s economic calendar:
• Eurozone: PMI composite for July
• Eurozone: Industrial new orders for May
• Eurozone: Consumer confidence for July
• France: Business confidence indicator for July
• France: Consumer confidence indicator for July
• UK: Retail sales for June
EUR- March
Luca Model: Short since July 21 (reversing long since July 1)
The overbought September euro edged up in the Far East after sinking on Wednesday. The short-term outlook is sideways to slightly bearish. The medium-term outlook is sideways and my model is short.
Wednesday’s low is 1.2731. Below 1.2684, the 21-day moving average lies at 1.2654. Distant support is at 1.2513.
Initial resistance is at 1.2827. The next caps are 1.2869 and 1.2920. Above 1.2960, Friday’s high was 1.3006.
INDICATORS
Fast stochastics: Bearish
MACD: Bullish
Ichimoku: Bearish
OUTLOOK
NEAR-TERM: Sideways to slightly bearish
MEDIUM-TERM: Sideways
LONG-TERM: Bearish
JPY - March
Luca Model: Long since July 22 (reversing short since July 20)
The September Japanese yen futures climbed up further in Asia on adversity to risk. The short-term outlook is slightly bullish. The medium-term outlook is sideways and my model is long again.
The high of the uptrend is 116.00. Further resistance is at 116.80.
Immediate support is at 115.15. Below 114.60, the next floor is 114.06.
INDICATORS
Fast stochastics: Slightly bullish
MACD: Sideways
Ichimoku: Bullish
OUTLOOK
NEAR-TERM: Slightly bullish
MEDIUM-TERM: Sideways
LONG-TERM: Sideways
GBP - March
Luca Model: Short since July 16
The September pound bounced up in the Far East after closing down on Wednesday. Thus, the pound remains in a rising channel. The short-term is sideways to slightly bearish. The medium-term outlook is sideways and my model is short.
Immediate support is at 1.5114 from the 21-day moving average. Below 1.5050, the next floor is 1.5106.
Initial resistance is at 1.5216. Above 1.5290, resistance follows at 1.5350.
INDICATORS
Fast stochastics: Bearish
MACD: Sideways
Ichimoku: Sideways
OUTLOOK
NEAR-TERM: Sideways to slightly bearish
MEDIUM-TERM: Sideways
LONG-TERM: Bearish
CHF - March
Luca Model: Short since July 16
The September Swiss franc is consolidating further after making no progress for three days. The short-term outlook is sideways to slightly bearish. The medium-term outlook is bullish and my model is short.
Immediate support is at .9470. Below .9420, last Monday’s low is .9376.
Initial resistance is at .9550. Further resistance lies at .9627 and .9678.
INDICATORS
Fast stochastics: Slightly bearish
MACD: Slightly bearish
Ichimoku: Bearish
OUTLOOK
NEAR-TERM: Bearish
MEDIUM-TERM: Bullish
LONG-TERM: Sideways
CAD – March
Luca Model: Short since July 16
The September Canadian dollar made no progress in the Far East after closing down on Wednesday. The short-term outlook is sideways to slightly bearish. The medium-term outlook is sideways and my model went long only briefly intraday.
Initial support is at .9477. Below .9427, there is support at .9360 from a pivot low.
Immediate resistance is at .9565 from the 21-day moving average. Further resistance is at .9621, .9667 and .9726.
INDICATORS
Fast stochastics: Slightly bullish
MACD: Slightly bearish
Ichimoku: Bearish
OUTLOOK
NEAR-TERM: Sideways to slightly bearish
MEDIUM-TERM: Sideways
LONG-TERM: Bullish
AUD – March
Luca Model: Short since July 22 (reversing long since July 20)
The September Australian dollar slipped in Asia after falling from a one-week high on Wednesday. The short-term outlook is sideways to slightly bearish. The medium-term outlook is sideways and my model went short.
Initial support is at .8692. The 100-day moving average is .8656. This is followed by .8600 and .8570.
The top of the uptrend is at .8808. Further resistance is at .8907.
INDICATORS
Fast stochastics: Slightly bearish
MACD: Sideways
Ichimoku: Bearish
OUTLOOK
NEAR-TERM: Sideways to slightly bearish
MEDIUM-TERM: Sideways
LONG-TERM: Bullish
