Thursday, July 22, 2010

Asia/Pacific stock markets and the gold/oil spread are down


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 

Chart 

EUR- March

Luca Model: Short since July 21 (reversing long since July 1)
Chart 
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)
Chart  
 
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
Chart 

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
Chart 

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
Chart

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)
Chart

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

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