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 from Paris, France for Sept. 27-28 here.

The Federal Reserve hiked interest rates Wednesday but as anticipated, it was not about the hike itself, it was about their direction going forward.

This brings us to the policy statement and the highlight here was the removal of one key word: accommodative.

Ultimately, they implied the belief that after this hike policy would no longer be considered accommodative. Markets across the board incurred a whipsaw response and with the Dollar Index (DXY) settling near the level it was ahead of the announcement, currencies were generally one of the more muted asset classes.

Was the removal of accommodative outright dovish? No, but this is a retreat from the more hawkish rhetoric we heard from Fed Governor Brainard and Chicago Fed President Evans three weeks ago.

Still, Fed Chair Powell came through exactly as expected and reiterated that there are no signs inflation will run away. At the end of the day, the U.S. dollar (USD) finished marginally green and the probability of a December hike firmed just a bit. This alludes to the impasse that the euro (EUR) currently finds itself. The currency has remained firm since the ECB left policy unchanged two weeks ago despite ECB chief economist Praet expressing some caution. Ironically, this has come on the heels of hawkish comments on inflation from ECB President Draghi.

Gears now shift to the data. Thursday morning German Consumer Climate is out. The ECB Economic Bulletin is released. Eurozone Confidence and Sentiment data is out. Lastly, September German CPI is out and this leads into the Eurozone read Friday.

From the U.S, the Fed’s preferred inflation indicator, the PCE Index, is out along with final Q2 GDP, Durable Goods Orders, Goods Trade Balance and weekly Jobless Claims. Pending Home Sales add to a busy week of housing data.

We also look to central bankers throughout the session. ECB President Draghi speaks today and BoE Governor Carney as they lead the ESRB annual conference. Separately, Fed Chair Powell is on the calendar Thursday at 3:30 pm CT but its unlikely to hear anything different than we did today.

Bank of Japan Governor Kuroda speaks. This comes on the heels of President Trump and Japanese Prime Minister Abe agreeing to advance trade talks in order to protect Japanese automakers. On the NAFTA front, a lack any headway has put pressure on the Canadian and it finished today’s session below first key support. Surprisingly enough, outside of this move in the Canadian, the other three markets have held within first key resistance and first key support from Monday’s report.

Bill Baruch was on Bloomberg TV this morning ahead of the Federal Reserve. You can watch his appearance from this link.

Euro (December)
Bias: Bullish/Neutral
Resistance: 1.1871*, 1.19355-1.1954***, 1.2010-1.2013**, 1.2123-1.2152***
Pivot: 1.1831***
Support: 1.1786-1.18055**, 1.1700-1.1709**, 1.1658*, 1.16125-1.1620***, 1.1570*

 

Yen (December)
Bias: Neutral/Bearish
Resistance: .8961-.89805**, .9058-.9075**, .91235-.9145**, .9184***
Pivot: .8935
Support: .88675***

 

Aussie (December)
Bias: Neutral
Resistance: .7313-.7318***, .7383-.7408**, 7486***
Pivot: .7257-.7273
Support: .7223**, .7122-.7150***, .7088**, .6962**, .6809***

 

Canadian (December)
Bias: Neutral
Resistance: .7774-.7804***, .7886**, .7981-.7982***
Pivot: .76955-.7699
Support: .7651-.7667***, .7575***

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View a short video: Bill Baruch: Trading Futures. Gold, USD, yuan.

Recorded: TradersExpo Chicago July 24, 2018.
Duration: 4:34.