Bill Baruch, president and founder of Blue Line Futures, reviews and previews forex markets including the euro, yen, US dollar, Canadian dollar and Aussie and today’s economic report calendar. Follow his reports Monday-Friday on MoneyShow.com and short Midday Markets video. Please share your comments on this report: mmathes@moneyshow.com.

Bill Baruch’s Midday Market Minute video here.
U.S. and China set to resume trade talks. Market impact?

Euro (September)

Session close: Settled 1.1751, up 52 ticks.

Fundamentals: The euro (EUR) gained Monday on mixed data but continued a bounce that began Friday morning. We view this move as technical as the currency consolidates ahead of a big two-day stretch. Tuesday morning, the first look at Eurozone CPI is due at 5:00 am EDT. This is followed by U.S PCE at 8:30 am EDT.

PCE is the Federal Reserve’s preferred inflation indicator and they begin a two-day policy meeting Tuesday and conclude Wednesday at 2:00 pm EDT with a statement. While inflation is the most critical data point Tuesday, we also get German Retail Sales at 2:00 am EDT, German Unemployment at 3:55 am and Eurozone GDP and Unemployment at 5:00 am.

Tuesday’s data will be absolutely critical in attempting to set a tone for the euro; after Monday’s close, the bulls have an edge.

Technicals: Thursday’s weakness was neutralized after failing to close below 1.16745-1.1690 on Friday. This laid the groundwork for a consolidation back into the middle of the two-day range to start the week and ahead of a big two-day stretch. However, the firm move on the session and close back above 1.1740 is key in giving the bulls the driver’s seat. Still, strong resistance persists at ...

 

Today’s economic calendar

Personal Income and Outlays: personal income increased $71.7 billion (0.4%) in June.

S&P CoreLogic Case-Shiller Home Price Indexes 20-city composite was 211.94, up 0.72%

Chicago Business Barometer ISM rises to 65.5 in July, with new orders and production bolstered as prices paid hits 10-year high.

Conference Board June Consumer Confidence Survey decreased to 126.4 now following an increase in May.

State Street Investor Confidence is 101.7, down 2.1 points on June 26.

 

Yen (September)

Session close: Settled at .90365, down 25.

Fundamentals: The Bank of Japan’s much awaited policy meeting is expected to conclude Monday at 11:00 pm EDT. A press conference was scheduled shortly after. Buzz last week gained traction that the central bank could tweak or firm up their time frame to normalize policy. Treasury yields have risen fairly sharply since the start of last week as funds must prepare for the chance that the bank removes their promise to keep the JGB at zero. The yen (JPY) has rallied but Monday’s session in the red while the U.S dollar (USD) was overall weaker against other currencies signaled that the yen has gone too far too quick without confirmation from this meeting.

Traders must be prepared for tremendous volatility. Also, due Monday night is Japanese Household Spending and Unemployment and Industrial Production.

Technicals: Price action has not been able to secure a close out above first key resistance and thus garner additional buying. This has encouraged the tape to settle in near major three-star support at ...

 

Aussie (September)

Session close: Settled at .7411, up 6 ticks

Fundamentals: Monday was a quiet session for the Aussie but it remained firm from Friday’s recovery. With a slew of U.S economic data scheduled over the next two days, Monday night will be crucial from a domestic perspective. Aussie New Home Sales was due at 9:00 pm EDT along with Chinese Manufacturing PMI. Signs of weakness and slowing in the Chinese economy along with trade worries have dented the Aussie for much of the last three months. On Wednesday the White House is expected to implement $16 billion in tariffs on Chinese goods, the next move from here will be critical.

Technicals: The tape firmed well from Thursday’s fallout, but the same story line persists; we must see a close above major three-star resistance at ... 

 

Canadian (September)

Session close: Settled at .76855, up 26.5 ticks.

Fundamentals: With NAFTA supposedly making progress and a massive day for the energies sector, the Canadian appears to be in a very nice spot fundamentally and technically. Still, it is not out of the woods with a deluge of data, tariffs and central banks over the next 48 hours. Canadian GDP MoM is due Tuesday along with the Raw Materials Price Index at 8:30 am EDT; these will be critical and confirming the technical breakout discussed below.

Technicals: Last Wednesday’s spike higher garnered a Bullish Bias from us and the two-day consolidation that followed set up a textbook bull flag pattern. If that wasn’t enough, today’s bull flag breakout was ...

Please sign up for a free trial at Blue Line Futures to view our entire technical outlook and proprietary bias and levels.