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Blue Line Express: FX Rundown


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Euro (December)

Session close: In a tight session the Euro finished up 7.5 ticks at 1.16195.

Fundamentals: Today came and went as expected, quietly. Tomorrow morning German Trade Balance is due at 1:00 am CT, the ECB Economic Bulletin at 3:00 am CT and the EU Economic Forecasts at 4:00. However, we will be paying close attention to comments from ECB Board Member Coeure at 4:00 am. He is said to be one of three heavy hitting policy makers that includes Bundesbank President Weidman who opposed an open-ended easing program that is tied to inflation and instead favoring it tied to asset prices. He also made comments last week that the divergence in ECB and Fed policy could encourage a rebalancing of portfolios away from US dollar denominated assets and support a stronger Euro. Ultimately, Coeure is hinting that he wants to see a stronger Euro. The ECB also has Constancio speaking at 7:45 am CT and later in the day Weidman speaks at 1:00 pm CT, Lautenschlaeger follows at 1:20. It will be an interesting session for the Euro as price action is at a key battle ground. Initial Jobless Claims are due out of the U.S at 7:30 am CT.

Technicals: Price action continues to test against key support at the 1.1622-1.1639 and it is fitting to see a quiet session ahead of a ferocious schedule tomorrow. The bulls must achieve the close out above this key level and minor support at 1.1655 will play a more critical role tomorrow and signaling a convincing close above the key level. Todays session low comes in at 1.1603 and a close below here will keep the bears in the drivers seat.

Bias: Neutral/Bullish

Resistance 1.1655*, 1.1671**, 1.1705-1.1722***, 1.1772**, 1.1837-1.1850**, 1.1921-1.1933***

Pivot - 1.1622-1.1639**

Support 1.1603*, 1.15785*, 1.1481-1.15***

Yen (December)

Session close: Finished up 6 ticks at .8803

Fundamentals: This was an overall underwhelming session for traders, but the next 24-48 hours should prove otherwise as the tax-reform discussion in the Senate is expected to heat up. Tonight, Current Account data is due out of Japan at 5:50 pm CT along with a slew of data. Chinese CPI and PPI is due at 7:30 pm CT along with a 30-year JGB auction at 9:45. Poor Chinese data would help boost the Yen and so would foreseeable hurdles on tax-reform.

Technicals: The settlement price continues to cling to the major three-star level at .8800-.8828. This was another disappointing day for the bull camp as price action traded to a high of .8833 and potentially broke out above steep trend line resistance but instead left a tail on the daily bar. The trend is weak, and the bears still have the slight edge.

Bias: Neutral/Bullish

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

Pivot- .8800-.8828***

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

Aussie (December)

Session close: Gained 35 ticks settling at 7674.

Fundamentals: The Aussie, like the metals complex could not make up its mind in the last few sessions, however, today was a solid session that opens the door to further gains. Chinese Trade Balance data showed stronger than expected imports and this is key for the Aussie trade. A slightly weaker Dollar on the session added further support. Home Loans data out of Australia is due tonight at 6:30 pm CT and Chinese CPI and PPI ad 7:30. Tomorrow evening we have the release of the RBA Minutes from their Monday meeting.

Technicals: Today was an inside session that continued to bounce off major three-star support. We are now taking away the Neutral side to our stand and becoming outright Bullish. We will monitor the bounce off support closely and with price action settling at the key pivot we ultimately want to see a close out above major three-star resistance at .7717-.7725 in order to remain outright Bullish. Todays settlement is above 9-day moving average which is beginning to round out and again make a run at the 21-day that comes in at .7744; it failed to make the cross on October 24th.

Bias:Bullish

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

Pivot - .7673

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

Canadian (December)

Session close: Gained 36 ticks on the session and settled at .7860.

Fundamentals: Strong Housing Starts and Building Permits with better revisions added to the move in the Canadian. We maintain that pessimism behind the very poor data is a self-fulfilling prophecy and guess what, the data has begun to not only turn a corner but do so in a hurry. We remain bullish and Dollar weakness would be the missing component to this rally.

Technicals: Price action finished right at major two-star resistance, but the momentum clearly lies in the hands of the bulls with the 9-day moving average rounding out on the bottom. We have adjusted major three-star resistance a little higher which now comes in at .7920-.7954. This brings strong overhead resistance in the tune of a trend line from the highs, the 100-day moving average and the .382 retracement from the highs.

Bias:Bullish

Resistance .7920-.7954***, .8019-.8035**, .8293****

Pivot - .7856

Support - .7745-.7790***, .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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