Bill Baruch, president and founder of Blue Line Futures, reviews and  previews the euro, Japanese yen, Chinese yuan, Aussie and Canadian and the upcoming economic report calendar. Follow his reports Monday-Friday on and short Midday Markets video.


Euro (December)

Fundamentals: The euro gained 10.5 ticks on Friday after a mixed U.S Nonfarm Payroll report. We discussed the report in our Tradable Events this Week. The euro slipped early this morning on the reemergence of Italian drama. Deputy Prime Minister Salvini called Jean-Claude Juncker and the European Commission the “real enemies” of Europe at an event with French far-right leader Marine Le Pen.

The yield on the Italian 10-year climbed to 3.6%, the highest in more than four years. While this certainly got the nerves going to start the week, a large miss on German Industrial Production coincided with sharpest chunk of the euro’s half-penny slide. Many look to German Industrial and Manufacturing data to gauge the pulse of the international trade dispute.

Bill Baruch discussed the overnight currency volatility on Bloomberg this morning and how we see a ceiling in the dollar. Tomorrow, we look to German Trade Balance at 2:00 am EDT. From the U.S, NFIB Small Business Optimism, which hit a record last month, is due at 6:00 am EDT. Chicago Fed President Evans, a voting member next year, speaks at 10:00 am EDT.

Technicals: Price action worked its way off session lows and first key support has now held its second hard-test in three sessions. Midweek last week, we introduced a marginal Bearish Bias until this support level could prove its worth. We are Neutral the euro, but our largest concern is the failure to regain first resistance at the ...


Yen (December)

Fundamentals: Safe-haven buyers stepped to the yen with the Shanghai Composite losing 3.7% back the first day back from Golden Week and as U.S benchmarks trekked lower. The yen shrugged off weakness in Treasuries and Gold as well as some strength in the U.S. dollar to post one of the strongest sessions on the board +0.50%. Still, as the S&P (SPX) finished 1% from its session low and NQ (NDX) 100 points from its low, the yen’s strength dissipated ahead of the bell. Current Account data is due out of Japan at 7:50 pm EDT. Going into tomorrow, traders want to keep an eye on the S&P as well as comments from Chicago Fed President Evans. Below 2900 in the S&P will leave price action very vulnerable. Evans dissented on the December hike one year ago but has expressed a more hawkish rhetoric as of late, his views will be key for the dollar.

Technicals: Price action could not get above major three-star resistance at .... 


Aussie (December)

Fundamentals: The Aussie gained ground out of default today. Price action has fallen precipitously since failing at major three-star resistance on September 26 and it was overdue for due for a dead-cat bounce from the lowest level since February 2016. China’s Caixin Services PMI beat expectations last night and the People’s Bank of China cut the reserve requirement ratio for the fourth time this year. While this can give some credence to the relief, overall weakness in Asia and broadly in commodities did not support the bounce and that is why we credit it one of a dead-cat. Tonight, NAB Business Confidence is due at 8:30 pm EDT.

Technicals: Price action has a long way to go to get out of the gutter, but one must start somewhere. Today was a positive note for a technical landscape that has not seen such in almost three weeks. The 14-day RSI did hit 30 which was the level it bounced from one month ago. Today’s move should have enough wind in its sails to test major three-star resistance at ... 


Canadian (December)

Fundamentals: The Canadian dollar got out ahead of itself in a “buy the news” event upon last week’s new NAFTA deal. While the currency consolidated, an extremely bad Ivey PMI poured cold water over the tape. Friday’s jobs report was good but not good enough to encourage a mindset that the next rate hike is on its way. To add pressure, Crude Oil slipped on Friday and commodities in general performed poorly to start the week. However, the currency finished well off its .7696 low on Canada’s Thanksgiving Day. Tomorrow, Bank of Canada Governor Wilkins will speak at 2:00 pm EDT.

Technicals: Once price action slipped below the Sunday night gap on Thursday, longs began liquidation. Still, the technical landscape is very constructive and last night’s low held major three-star support at .76955-.7705... 

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

Recorded: TradersExpo Chicago July 24, 2018.

Duration: 4:34.