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FX Rundown - Blue Line Express

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FX Rundown

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Euro (December)

Session close:Gained about 75 ticks on the session

Fundamentals:The Euro extended an already strong session after the FOMC Minutes this afternoon. The Minutes showed that Fed officials are concerned about persistently low inflation and are worried that they may have undercut it with rate hikes. While most officials are set to hike rates in December, we must walk away from these Minutes with an emphasis on gradual moving forward. Fed Chair Yellen laid the groundwork for these Minutes in her speech last night with caution on raising rates too quickly as it would potentially halt inflation. This kicked off a strong session for the Euro that saw additional support for weak U.S Durable Goods. Thoughtomorrowis the Thanksgiving holiday in the U.S it brings the heat with data around the rest of the world; German GDP is at1:00 am CT, regional PMIs from France and Germany are due at2:00 and 2:30 amwhile the Eurozone read is at3:00. U.K GDP is also due at3:30. The ECB publishes their Monetary Policy Meeting at6:30 am CT. The ECBs Praet speaks at2:35 am CTand Coeure at12:15.

Technicals:This is an extremely strong technical session coming on the heels of a hold against major three-star support. Price action is now above the 1.1804-1.1806 level that we discussed yesterday which is now support at 1.1803-1.1810. Resistance comes in at 1.1866-1.18815 and the bulls are in the drivers seat as a leg this strong should signal a move to the major three-star level at 1.1921-1.1934.


Resistance 1.1804-1.1806**, 1.1866-1.18815**, 1.1921-1.1934***, 1.1991*, 1.2019**

Support 1.1705-1.1730***, 1.1694**, 1.1650**, 1.15785*, 1.1481-1.15***

Yen (December)

Session close:Gains about a penny on a strong session.

Fundamentals:The Dollar is down against all major currencies today and the Yen has gained as much as a penny. Above, we discussed the dovish outlook from the Fed Minutes and the groundwork that Janet Yellen laid last night, but one might counter with the fact that the BoJ is more dovish. It does not matter if the BoJ is more dovish and this is because of the pendulum of perception that we love to talk about. Dollar bulls and Yen bears have already positioned themselves on certain expectations and if those expectations are not met then the trade begins to get outwound. Maybe that is because three hikes by the Fed are now not expected next year or maybe because there is a glimmer that the BoJ sees diminishing returns from their QE and will need to taper back at some point in 2018. We are more bullish the Yen today than we were yesterday.

Technicals:Price action traded and settled above major three-star resistance at .8971-.8990, however, we will continue to watch this level into the end of the week. This has the makings of a breakout as the largest short position in the Yen since 2007 will begin to tap out. Todays session low never traded below the 50-day moving average at .8890 and used this as a spring board. We also have major three-star resistance just above at .9045 and a close above here could ignite the next bull leg to .9321-.9359. The 200-day moving average comes in at .9018 so you can see that there is a lot of resistance within this range, hence the power and short-covering that we could see on a close out above here.


Resistance - .8971-.8991***, .9018**, .9045***, .9119**, .9321-.9359****

Support - .8890-8928**, .8800-.8828***, .8755-.8764**, .8639**, .8427***

Aussie (December)

Session close:Gained about 30 ticks on the session

Fundamentals:Todays follow through on the Aussie was supported by a weaker Dollar. The session was light on Aussie centric news. However, a strong session saw further support from rising commodity prices.

Technicals:Support held overnight, and price action got out above first resistance today and we are now creating major three-star resistance at .7645-.7678; this is the trend line from the September highs combined with the 200-day moving average and will be a tough level to crack. However, a move out above here would encourage further buying.


Resistance - .7645-.7678***, .7726-.7755**, .7824**, .7891-.7893***

Pivot - .7605-.7607

Support - .7530-.7550**, .7390****

Canadian (December)

Session close:Gained about 40 ticks on the session

Fundamentals:As with the other currencies, the Canadian capitalized off a weaker Dollar. Crude Oil put in a strong session with the front month contract trading to the highest level since July 1st, 2015 and closing there. We are also bullish Crude and expect higher price action into next weeks OPEC meeting. Data has been light out of Canada all week buttomorrowbrings Retail Sales at7:30 am CT.

Technicals:Today clearly broke the Canadian out above trend line resistance from the September highs and against price action over the last two weeks. The market now has a bullseye on major three-star resistance at .7950-.7960 which encompasses the 50 and 100 day moving average.


Resistance .7851-.7856**, .7897**, .7950-.7960***, .8019-.8035**, .8293****

Support - .7790-.7803***, .7730-.7745**, .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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