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Blue Line Express: FX Rundown

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Euro (December)

Session close: They Euro lost 34 ticks on the session

Fundamentals: The Fed did not bring any surprises today, but it was U.S data with ADP coming in much better than expected that began to strengthen the Dollar this morning. Manufacturing data from Spain and Italy are due tomorrow morning before the Germany at 3:55 am CT. Germany will also release Employment data at this time and the Eurozone Manufacturing read will follow at 4:00 am CT. There will also be a Spanish treasury auction tomorrow. The Bank of England will bring volatility across the board with a policy decision due at 7:00 am CT and press conference to follow.

Technicals: Major three-star resistance at 1.1705 has continued to hold strong and we have a lower session high today than yesterday. Price action is testing support at the 1.1622-1.1639 level and we will be watching this on a closing basis; if the bears achieve a close below here we should see further selling pressure.


Resistance 1.1705***, 1.1736**, 1.1767**, 1.1814**, 1.1860-1.1879**, 1.1921-1.1933***,

Support 1.1622-1.1639**, 1.1604*, 1.1481-1.15***

Yen (December)

Session close: Settled down 43 ticks.

Fundamentals: Global equity markets started the month off with a bang and the Nikkei and DAX put in huge session. The S&P and NQ traded higher, but a paring of gains began in the U.S session. Still, there was a sense of strength in equities that kept the Yen depressed. Furthermore, BoJ candidate Takatoshi Ito said that the BoJ cannot exit stimulus with inflation below 1%. Well, this put pressure on the Yen because Japan has been trying to invigorate inflation since the beginning of time.

Technicals: The weakness is real, todays session followed through to the downside and settled below major three-star support at .880-.8828. The session high came in at .8871 and failed against first resistance at .8868. The next level of support comes in at .8755-.8764 and this aligns with the recent swing low. The bears will step into the drivers seat until a close back above the .8800-.8828 level.


Resistance - .8868**, .8894**, .8980**, .9028-.9029**, 9057***

Pivot- .8800-.8828***

Support - .8755-.8764**, .8639**, .8427***

Aussie (December)

Session close: The Aussie gained 12 ticks on the session.

Fundamentals: Today was a huge day for base metals with Platinum and Palladium trading up almost 2%, we discussed this today in our Midday Market Minute. Copper and Silver also had strong sessions. This is a great recipe for the Aussie to hold ground in a weakened technical and fundamental environment. The run in the metals will depend on price action in the U.S Dollar over the next two sessions with the next Fed Chair likely announced tomorrow. We also have Jobless Claims, Nonfarm Productivity and Fed speak. Of course, Friday brings Nonfarm Payroll. Thursday evening, we have Retail Sales out of Australia.

Technicals: Major three-star support proved to hold the dreaded second test as price action drifted higher through todays session. Price action finished right at the 200-day moving average at .7672 and still faces strong resistance at .7717-.7725; a close above here on the week is needed to spark short covering.

Bias: Neutral

Resistance - .7717-.7725***, .7780**, .7872-7902**, .7964**, .8096-.8115***

Pivot - .7672

Support -.7622***, .7550**, .7390****

Canadian (December)

Session close: Finished up 9 ticks

Fundamentals: Crude made a run at the highs of the first week of the year at 55.24 and this helped the Canadian stop the bleeding it had on the heels of GDP. If Crude as well as commodities hold solid value from todays move (though Crude has begun to pare gains), we should see the Canadian consolidate well into employment data Friday. Bank of Canada Governor Poloz spoke again today and said the uncertainty around NAFTA will delay investment decisions in Canada. He also discussed the unknown economic downside risks after two rate hikes.

Technicals: Todays session traded to a higher low of .77485 vs .77455 yesterday. Price action is depressed, and RSI has now traded below 30 for 5 straight sessions, this should open the door for a consolidation higher at a minimum. There is good value here after losing more than 6.5% from its high and many of the longs have already bailed.

Bias: Neutral/Bullish

Resistance .7856**, .7918-.7924** .8035-.8046***, .8293****

Pivot - .7790***

Support -.7725**, .7671**, 7550***

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Futures trading involves substantial risk of loss and may not be suitable for all investors. Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results.

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About the author

Bill Baruch is President and founder of Blue Line Futures a leading futures and commodities brokerage firm located at the Chicago Board of Trade. Blue Line’s mission is to put the customer first and bring YOU the best customer service, consistent and reliable research and state of the art technology. Bill has more than a decade of trading experience. Working with clients he focuses on developing trading strategies that present a clear objective for both long and short-term trading approaches. He believes that in order to properly execute a trading strategy, there must be a well-balanced approach to risk and reward.

Prior to Blue Line, Bill was the Chief Market Strategist at iiTRADER which followed running a trade desk at Lind Waldock and MF Global.

Bill is a featured expert on CNBC, Bloomberg and the Wall Street Journal as well as other top tier publications.

Contributing author since 10/6/17 

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