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 Minute video. Please share your comments on this report: mmathes@moneyshow.com.
Bill Baruch’s Midday Market Minute video here.
Crude oil trades off of technicals as traders await inventory data from the API and EIA.
Euro (September)
Session close: Settle at 1.1591, down 22.5 ticks
Fundamentals: Friday’s settlement at 1.16135 was the lowest for the September euro (EUR). After failing to hold 1.18 for at least the sixth time since the May collapse, weakness in the latter half of last week has carried into Monday.
Adding to the pressure was a big whiff on German Factory Orders, the only key data point on the economic calendar to start the week. A private survey on Eurozone Investor Confidence did beat though. Friday’s Nonfarm Payroll was certainly nothing to write home about but ultimately the sentiment on the global trade conflict has kept buyers of the euro on the sidelines until further clarity.
While U.S data has been inconsistent, it hasn’t shown the vulnerability to trade that other regions of the world have, i.e. German Factory Orders Monday. This week’s economic calendar is bare: Tuesday, we look to German Trade Balance and Industrial Production at 2:00 am EDT and French Trade Balance follows. Last week, both ISM reads from the U.S missed expectations but were still at high levels. From the U.S. JOLTs Job Openings in June were little changed at 5.7 million hires and 5.5 million separations. Things will culminate into a critical CPI read on Friday.
Technicals: We were loud and clear here last Tuesday; “Price action failed directly at first key resistance… Because of today’s failed breakout, we must begin to Neutralize our Bias.” Weakness has persisted and the close below major three-star support at ...
Yen (September)
Session close: Settled at .9001, down 13 ticks.
Fundamentals: After Tuesday’s post-Bank of Japan fallout, the yen (JPY) has slowly pared losses. The landscape is uncertain and unenthusiastic at best.
On one hand this “safe-haven” asset has held well with U.S equity benchmarks at or approaching record levels.
However, on the other hand one could say this “safe-haven” asset has not responded to global uncertainty due to trade and a Shanghai Composite that has lost nearly 20% YTD.
The question persists, is this a safe haven asset at all anymore with the trade conflict denting economic growth in the region while the Bank of Japan sends one mixed signal after another? The one thing we do know is that there is a deluge of data from Japan this week, but whether the yen reacts is another altogether. Household Spending is out Monday night.
Technicals: The technical picture does not look pretty. In fact, we must point out a developing…
Aussie (September)
Session close: Settled at .7391, down 15 ticks.
Fundamentals: While the U.S dollar (USD) is not showing runaway strength, it is certainly more resilient than its trading pairs and this is all that matters. The Aussie is right in the middle of its nearly two-month range heading into Monday night’s RBA Meeting. While they are not expected to adjust policy upon their decision at 12:30 am EDT, their tone will certainly set one for the tightly consolidating currency.
Not only has U.S and China trade relations hampered growth in the region, but Australia’s own trade hurdles with their number one trade partner China have also had a negative effect. Still, the Aussie has failed to press lower and Monday night could be a defining moment and we will put an emphasis on the technicals.
Technicals: Major three-star resistance and support at ...
Canadian (September)
Session close: Settled at .7695, down 15 ticks.
Fundamentals: Sentiment has improved against the Canadian due to economic data turning a corner, the Bank of Canada’s willingness to tighten policy and upbeat developments on NAFTA. We have seen this correspond directly in price action, however, a failure to see fresh positive news may not bode so well in the near term as those willing to buy have already bought. Price action seems to be struggling to attract new buying, Monday was a holiday and Tuesday’s read on Ivey PMI will be crucial.
Technicals: Technically speaking, as a bull, we are happy to see price action hold above ...
