Bill Baruch, president and founder of Blue Line Futures, reviews and previews forex markets Tuesday including the euro, yen, U.S. 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 short video here
Crude oil collapses after weekly inventory data.
Euro (September)
Session close: Settled at 1.1628, up 37 ticks.
Fundamentals: Strong Trade data from Germany at 2:00 am EDT showed better than expected Imports and Exports. This neutralized the three-session fallout traders even turned a blind eye to the poor read on Industrial Production. The tape responded immediately and held gains through the session after U.S JOLTs Job Openings came in soft. Tomorrow’s economic calendar is even more bare, and this helps build the emphasis on Friday’s U.S CPI. We maintain our belief that the euro is undervalued in the long-term at this level.
Technicals: Today’s price action neutralizes the immediate-term weakness but as we said yesterday, the bears have an edge until a close above major three-star resistance at ...
Yen (September)
Session close: Settled at .8999, down 2 ticks.
Fundamentals: Today was another tight range for the yen. Early strength on the heels of stronger than expected Household Spending and a weakening Dollar overnight dissipated through the session. The yen finished on the lows and the technicals (discussed below) paint a negative picture. At 7:50 pm EDT, Current Account, Bank Lending, Foreign Reserves data and Bank of Japan Summary of Opinions are all due. Traders should also keep an eye on Chinese Trade Balance data tonight.
Technicals: After last Tuesday’s sharp move lower, price action has slowly consolidated higher. Today’s swing high failed at first key resistance at ...
Aussie (September)
Session close: Settled at .7424, up 33 ticks.
Fundamentals: The Reserve Bank of Australia left interest rates unchanged last night as expected. The bank was overall upbeat on growth and the Aussie responded trading to a one week high. Commodities did give back some gains Tuesday as the U.S dollar strengthened and the Aussie trimmed gains in a not so pleasant test to technical resistance (discussed below). Tonight, Home Loans data is due at 9:30 pm EDT. Traders must watch Trade Balance data out of China which should be due before 1 am EDT. RBA Governor Lowe is also expected to speak at 11:05 pm EDT.
Technicals: We remain upbeat on the Aussie and see tremendous long-term value down here. While price action did take out a trend line from the June high it remains contained under ...
Canadian (September)
Session close: Settled at .76585, down 36.5 ticks.
Fundamentals: In Monday’s Morning Express we pointed to Saudi Arabia ceasing diplomatic ties with Canada after Canada urged them to release women’s rights activists from jail. The situation has seemingly worsened after Saudi said it will not buy Canadian wheat or barley. We may not have seen a tremendous reaction in the price of the Canadian yet and may not, however, it is a developing story to keep an eye on. In fact, the Canadian followed commodity prices higher overnight. Weakness today truly came from a whiff on Ivey PMI. Canadian data had been trying to turn a corner, but this is the third miss in a row for Ivey PMI and the worst since March. Furthermore, as weakness in the Canadian picked up, Crude Oil retreated from its swing high and added to pressures.
Technicals: Today’s weakness could lay the groundwork for a budding failure. However, we are not Bearish and price action has held our major level at…
