Bill Baruch, president and founder of Blue Line Futures, reviews and previews the euro, Japanese yen, Chinese yuan Aussie and Canadian for Friday 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. 25 here.
Equity markets backing off overnight highs. RUT holding positive now. 10-year Treasury buying opportunity. Crude testing $72.90. Silver is on the move ahead of option expiration. Bears driving USD. Gold holding.
Bill Baruch’s Morning Express for Sept. 25 here.
Equities in the Clear? Not so fast. Crude Rips. USD builds vs. yuan, Gold.
Euro (December)
Session close: Settled at 1.1836 up 10.5.
Fundamentals: The euro (EUR) firmed up early Monday morning on better than expected German Ifo Business Climate. It then ripped to the highest level since July after ECB President Mario Draghi gave an upbeat outlook on inflation and wage growth to the European Parliament. Bund and Treasury yields both rose to session highs on what was taken as hawkish comments.
However, his speech was bubble wrapped with remaining patient on tightening policy and confirming that the ECB has no plans to hike rates until at least after the summer next year. Ultimately, this reined in price action and the euro pared the session’s gains. In addition to Draghi, there was a barrage of news that included conflicting reports on the resignation or firing of U.S Deputy Attorney General Rosenstein coupled with comments from Secretary of State Pompeo that the American Pastor in Turkey could be released. Potentially, after the initial reports were denied, the fact the Deputy AG still holds his position ahead of a meeting with President Trump Thursday provided a bit of support to the U.S Dollar.
Tuesday morning, there is no major data out of Europe.
Also, the Federal Reserve begins a two-day policy meeting tomorrow and is expected to hike interest rates on Wednesday.
Technicals: Price action was firm through the first half of Monday day trading to a high of 1.1893 before retreating to unchanged. Friday settled at 1.18255 and this was right at our pivot and previous major three-star resistance. While today was disappointing from the highs, the euro while hugging this pivot, remains very constructive. First key support comes in at ...
Yen (December)
Session close: Settled at .89265, down 14 ticks .
Fundamentals: The Japanese yen (JPY) lost ground for the ninth session out of twelve in what we have called the most unenthusiastic trade on the board. Meaning that there has been little to no reason for anyone to buy the yen as rates around the world grind higher and U.S equity markets set records on a daily basis. At the same time, one must be cautious due to elevated valuations and the geopolitical landmine and this means the yen could rip at any point. However, one thing we noticed since the Bank of Japan met last week was that the JGBs have trekked higher in a pseudo sort of tightening as they trimmed purchases which would otherwise buoy prices and keep a ceiling on yields. Monday night, the BoJ released the Minutes from their July meeting, not the one from last week.
Technicals: Price action closed below the .8935 level which is now our pivot and aligns closely with our momentum indicators. The yen is immediate-term bearish until a close back above ...
Aussie (December)
Session close: Settled at .7260, down 26 ticks,.
Fundamentals: Considering that U.S and China trade relations have completely deteriorated; the Aussie is holding ground tremendously well. Although it did finish down on the session, major technical resistance overhead arguably feels like the key catalyst from stopping last week’s recovery. On the commodities side, Palladium, Copper and Crude Oil have all been on a tear and these have been a driver in the rally from the lows. There is no data out of Australia Monday night, but traders want to keep a close eye on the global risk appetite after Monday’s stalled session.
Technicals: After ripping 2% over three sessions from the bull-flag development in oversold territory at our major three-star support, traders do not want to be long the Aussie. Price action ran perfectly to our major three-star resistance target before retreating on Friday. The Aussie settled below our pivot level today but does not face true support until ....
Canadian (December)
Session close: Settled at .7740, down 11 ticks.
Fundamentals: The Canadian (CAD) retreated as Monday became more of a risk off session and the U.S dollar (DXY) gained ground. Trade tensions have escalated between the U.S and China while there has been no good news on the NAFTA front. The global risk perception will be key heading into tomorrow and traders must keep an ear to the ground on any NAFTA developments with the end of the month quickly approaching. On Friday, CPI was in line with expectations and Retail Sales was mixed. Today, Wholesale Sales beat.
Technicals: Our target at major three-star resistance was achieved last week and we are now waiting for price action to peel back. We are still upbeat on the Canadian in the longer-run but the value will be seen at first key support at ....
View a short video: Bill Baruch: Trading Futures. Gold, USD, yuan.
Recorded: TradersExpo Chicago July 24, 2018.
Duration: 4:34.
