Wednesday, July 28, 2010

The Asia/Pacific stock markets are down


Forex Special

The foreign currencies futures consolidated as usual in the Far East amid declining appetite for risk. Most of the European and commodity currencies had ended down, as I expected, while the yen closed up. The Asia/Pacific stock markets are down and the gold/oil spread up. 
I had been looking for a likely medium-term top to form in most by mid-Wednesday and this seems to be the case.  The short-term outlook is slightly bearish for most of the European and commodity currencies and bullish on the yen. The medium-term outlook is sideways for most of the foreign currencies futures. My model is short only on the yen and Swiss franc.
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:

  • Japan: Japan: Retail sales fell 0.4% percent in June following the 2.0% contraction in May. Retail sales climbed 3.2% on year following the 2.8% increase in May.   
  • Australia: HIA new home sales for June    

Chart 


Today’s economic calendar:

  • Germany: Unemployment rate for July
  • Eurozone: Consumer confidence/economic confidence/industrial confidence/services confidence for July. 
  • UK: Mortgage approvals for June  

EUR- March

Luca Model: Long since July 22
Chart  
The September euro was quiet in Asia after closing flat in an inside range. The euro probably put in a medium-term top already. The short-term outlook is slightly bearish. The medium-term outlook is sideways and my model is long.
The 100-day moving average supports at 1.2911. Below 1.2879, the next floors are 1.2846 and 1.2812.   
The top of the trend is 1.3046. The next cap is 1.3108. Distant resistance is perched at 1.3275.

INDICATORS 
  
Fast stochastics: Sideways
MACD: Bullish
Ichimoku: Bearish


OUTLOOK

NEAR-TERM: Slightly bearish
MEDIUM-TERM: Sideways
LONG-TERM: Bearish

JPY - March

Luca Model: Short since July 20
Chart   

The September Japanese yen remained firm in the Far East after closing up on Wednesday. The short-term outlook is slightly bullish. The medium-term outlook is sideways and my model is short. 

Immediate resistance is at 115.08. Above 115.46, the high of the uptrend is 116.00. 
The 21-day moving average supports at 113.91.  Further support is at 113.11 and 112.72.

INDICATORS
  
Fast stochastics: Bearish (Bearish divergence; oversold)
MACD: Bearish (Bearish divergence)
Ichimoku: Sideways     


OUTLOOK

NEAR-TERM: Slightly bullish
MEDIUM-TERM: Sideways      
LONG-TERM: Sideways

GBP - March

Luca Model: Long since July 23
Chart 

The September pound made no progress after marking a new high for the uptrend on Wednesday. The short-term is sideways for half a day and then slightly bearish. The medium-term outlook is bullish and my model is long. 

The uptrend high is 1.5635. Further resistance follows at 1.5645 and 1.5766.
Immediate support is at 1.5520. The next floors are 1.5445 and 1.5396. 

INDICATORS 
  
Fast stochastics: Bullish (overbought) 
MACD: Bullish
Ichimoku: Sideways


OUTLOOK

NEAR-TERM: Sideways for half a day, then slightly bearish 
MEDIUM-TERM: Bullish 
LONG-TERM: Bearish

CHF - March

Luca Model: Short since July 23
Chart 

The September Swiss franc consolidated in the Far East after closing up the day before. Yet, a medium-term peak is probably already in place. Only a convincing break below the 21-day moving average will confirm a bearish medium-term outlook. As of now, we only have a yoyo pattern for five days. The short-term outlook is sideways for half a day and then slightly bearish. The medium-term outlook is bullish but my model is short.

Initial resistance is at .9480. The next resistance levels are .9537 and .9595. The top of the uptrend is .9629. 
Immediate support is at .9425 from the 21-day moving average. The next floors are .9386 and .9311. 

INDICATORS

Fast stochastics: Bearish (oversold)
MACD: Slightly bearish
Ichimoku: Bearish


OUTLOOK

NEAR-TERM: Sideways for half a day, then slightly bearish
MEDIUM-TERM: Bullish
LONG-TERM: Sideways

CAD – March

Luca Model: Long since July 22
Chart 

The September Canadian dollar marked time overnight after falling on Wednesday. It remains in a symmetrical triangle. The short-term outlook is slightly bearish. The medium-term outlook is sideways and my model is long. 

The 55-day moving average supports at .9617 and the 21-day moving average at .9600. Further support is at .9550.  

Immediate resistance is at .9660. Above .9729, further resistance is at .9784. A pivot high is at .9857. 

INDICATORS
  
Fast stochastics: Sideways
MACD: Slightly bullish
Ichimoku: Sideways


OUTLOOK
NEAR-TERM: Slightly bearish
MEDIUM-TERM: Sideways
LONG-TERM: Bullish

AUD – March

Luca Model: Long since July 20
Chart 

The overbought September Australian dollar remained soft in Asia after falling since Tuesday. The short-term outlook is bearish. The medium-term outlook is sideways and my model is long. 

Immediate support is at .8851. The next floors are .8797 and .8650. 
Initial resistance is at .8954. Above .8992, key resistance area is at .9030-45. 

INDICATORS 
   
Fast stochastics: Slightly bearish
MACD: Bullish
Ichimoku: Bearish


OUTLOOK

NEAR-TERM: Slightly bearish
MEDIUM-TERM: Sideways
LONG-TERM: Bullish


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