Bill Baruch, president and founder of Blue Line Futures, reviews and previews the euro, Japanese yen, Aussie and Canadian for Tuesday-Wednesday and the upcoming economic report calendar. Follow his reports Monday-Friday on MoneyShow.com and short Midday Markets video.
Bill Baruch’s Midday Market Minute short video for Sept. 18 here.
Stocks brush off tariff talk Tuesday. Apple, Fitbit left off the tariff list. Stocks working their way back up to SPX 2924.
Bill Baruch’s Midday Market Minute short video for Sept. 17.
Stocks soften up to start the week. A slower day with some consolidation. That’s when technical become important.
Euro (December)
Session close: Settled at 1.1768, up 52.5 ticks.
Fundamentals: The euro (EUR) posted a strong start to the week along with the British pound (GPB) as traders look to the first of three EU summits Wednesday as a step towards reaching a Brexit deal. The U.S dollar (USD) was also broadly weaker against all major currencies on the heels of last week’s soft inflation data and after NY Empire State Manufacturing missed expectations this morning. Monday morning, the final read on August Eurozone CPI was right in line with expectations. Also, the German Bundesbank released their Monthly Report and they voiced an upbeat tone on the economy. They noted better than expected sentiment and were confident that manufacturing will pick up in the coming months. All in all, this was a great start to one of the slower weeks on the economic calendar this month. Tuesday, ECB President Mario Draghi is expected to speak at 4:15 am EDT. From the U.S, a stretch of housing data over the next few days kicks off with NAHB Housing Market Index at 10:00 am EDT.
Technicals: Today was a very constructive session given Friday’s weakness. The euro is back near 1.18 and again facing a critical band of resistance. First, multiple technical indicators including a trend line that was tested last week align directly overhead at ...
Yen (December)
Session close: Settled at .8997, up 11.5 ticks.
Fundamentals: We have been calling the Japanese yen (JPY) a very unenthusiastic trade and ultimately, that is exactly what it comes down to. Safe-haven spikes have proven to be prime fading opportunities. Not only has Japan’s proximity to China reduced the ability of the yen to capitalize on trade war fears, the Bank of Japan has failed to follow through on firming up a time frame to tighten monetary policy. Still, traders will be on edge Tuesday night for the Bank of Japan’s monetary policy meeting and any signs that point to a potential shift in policy at the end of the first quarter next year. The yen notched a gain of only 0.1% Monday although both the Dollar Index (DXY) and the S&P 500 (SPX) lost about 0.5%. Monday was a small step forward, but the next two steps back are casting a large shadow.
Technicals: Price action has struggled to hold ground and as we pointed to .9000 as the benchmark in the September contract, we now look to ...
Aussie (December)
Session close: Settled at .7183, up 15 ticks.
Fundamentals: The Aussie (AUD) recovery from the lowest level since February 2016 will certainly get put to the test over the next 24 hours. The obvious headwind is President Trump imposing 10% tariffs on $200 billion in Chinese goods starting next week. China is Australia’s number one trade partner and the trade war will continue to take a toll on the entire region. Secondly, the RBA holds a policy meeting at 9:30 pm EDT. Their tone has slowly become more dovish but not only so because of the trade war, lenders have raised rates on borrowers and this has tightened policy for the central bank. Traders must keep an ear to the ground on the development on both fronts.
Technicals: Price action has staged a shallow recovery and is attempting to build a bull flag from the two-day spike through September 13 and must close out above first key resistance at ...
Canadian (December)
Session close: Settled at .76895, up 2.5 ticks.
Fundamentals: Canadian Foreign Minister Freeland said Monday that she will be back in Washington this week to continue talks in hopes of reaching a new NAFTA deal by October 1. President Trump has threatened to leave Canada out of a deal with Mexico if the two sides cannot come together. While this seems extremely unlikely especially since Washington will be under greater pressure with the newly imposed $200 billion in tariffs on China, at this point, traders must prepare for any possibility.
While we find the Canadian positioned very well for longer-term gains, it is under pressure due to the China tariffs and this also casts doubt in the near-term.
Technicals: The Canadian settled back below the .7698 pivot which begins to negate some of its near-term strength. However, what traders must watch most closely is first key support at ...
View a short video: Bill Baruch: Trading Futures. Gold, USD, yuan.
Recorded: TradersExpo Chicago July 24, 2018.
Duration: 4:34.
