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FX Rundown - Blue Line Express


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Euro (December)

Session close: Gained 2 ticks on a quiet session.

Fundamentals: Traders gear up for tomorrows ECB panel that includes Draghi, Yellen, Carney and Kuroda. ECB Vice President Constancio, a dove, spoke today on how the ECBs policy should remain loose and accommodative because of lagging inflation despite stronger growth and falling unemployment. Regional CPI data begins with Germany overnight at 1:00 am CT. Chicago Fed President Evans speaks ahead of the panel at 2:05 am CT. Lautenshlaeger, a hawk, also speaks tomorrow at 3:00 am CT. The panel gets underway tomorrow at 4:00 am CT, the same time that German Sentiment data, Eurozone GDP and Industrial Production are all due. At this point, the day is just getting started with the Feds Bullard and ECB Board Member Coeure still set to speak and we away U.S PPI data. Tomorrow will be news driven and traders must be prepared to be nimble.

Technicals: We remain bullish on the Euro, however, major three-star resistance at the 1.1705-1.1722 level has kept a lid on price action. Tomorrows events will ultimately dictate the tape and a close above this key level will add technical momentum. The bears look to achieve a close below key support at the 1.1622-1.1639 level in order to signal a failure and encourage further selling.

Bias:Bullish

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

Support 1.1622-1.1639**, 1.15785*, 1.1481-1.15***

Yen (December)

Session close: Gained two ticks on an unenthusiastic session.

Fundamentals: Safe haven assets were under pressure on Fridays session, but the weaker Dollar kept the Yen elevated. Right now, the trade is more about the U.S than it is Japan; tax-reform, the Feds path and global equity markets. BoJ Governor Kuroda will join the ECB panel tomorrow.

Technicals: We remain long term bullish and price action continues to battle at the .8800-.8828 level. Thursdays rally turned out to be yet another disappointment and the gains in the Yen have slowly bled away. The tape has been weak for months and the bulls must battle at this key level in order to fight off the bandwagon trade. This appears to be the largest speculative short position in the Yen on record. The current net-short position also appears to be at a historic level and the total shorts are now larger than any time in 2013. When the Dollar corrects, the Yen will see a massive short covering rally.

Bias: Bullish

Resistance - .8868-8879**, .8971-.8980***, .9023-.9045***

Pivot- .8800-.8828***

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

Aussie (December)

Session close: Lost 33 ticks on the session

Fundamentals: The Aussie finished last week on a very poor and has extended losses to the lowest level since July. The US Dollar hasnt held its own ground over the last couple sessions, but rising yields have put pressure on the likes of the commodity currency. Fixed Asset Investment, Industrial Production and Retail Sales out of China are due tonight at 8:00 pm CT.

Technicals: We began Neutralizing our bias in the latter half of last week and new lows give way to the bears. Price action has traded to a low of .7611 tonight and is testing major three-star support at .7622, we must see how this plays out into tomorrow.

Bias:Neutral

Resistance - .7663**, .7717-.7725***, .7780**, .7872-7902**, .7964**, .8096-.8115***

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

Canadian (December)

Session close: Lost 29.5 ticks on the session.

Fundamentals: The back half of this week will be extremely crucial for the Canadian Dollar trade with Manufacturing Sales data and a BoC Review on Thursday but more importantly inflation data on Friday. Remember this trade is pared against the U.S Dollar which begins a crucial stretch tomorrow.

Technicals: The Canadian has seen a nice relief rally from oversold conditions. Better yet, supporting our bullish case is the further relief in the net long position bringing it to the lowest level since the first week of August. Price action reached a high of .78975 on Friday and fell short of major three-star resistance. The market is due for a consolidation phase from its recent bounce. The bulls look to keep settlement prices above the .7851-.7856 level to avoid further waves of selling that should stick their nose below .78.

Bias:Bullish

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

Support - .7851-.7856**, .7745-.7790***, .7671**, 7550***

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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