FX Rundown: Bullish Euro? Yen May Gain. Aussie Higher. CAD Bullish

10/10/2018 7:48 am EST

Focus: FOREX

Bill Baruch

President and Founder, Blue Line Futures

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 MoneyShow.com and short Midday Markets video.

Bill Baruch’s Midday Market Minute short video for Oct. 9 here.
Equity markets are bouncing from early morning low. You could see accelerated selling. Bears in driver's seat. RUT testing new lows. Crude resistance $75.27. Gold pressure, Treasury auctions this week.

Euro (December)

Session close: Settled at 1.1560, up 8.5 ticks.

Fundamentals: The euro fell this morning at 2:00 am EDT after German Imports and Exports both came in lower than expected. Pressure was again added by the budget standoff between Italy and Brussels. However, sentiment began to turn after 8:00 am EDT when Dallas Fed President Kaplan spoke. Although he supported the expectation of three more quarterly hikes by June, he did remind investors that the yield curve has been flattening for the last several months and this is a signal that slower growth is ahead. His comments seemed to put a floor in the euro just as it traded to a session low of 1.14935, the lowest since August 17. Chicago Fed President Evans did not make comments on policy, but he speaks again Wednesday at 12:15 am EDT. Traders want to keep an eye on U.K GDP, Industrial Production and Manufacturing Production all at 4:30 am EDT tomorrow. This could really set a tone for the currency market versus the Dollar with the international trade conflict on investors’ minds. From the U.S PPI is due at 8:30 am EDT and a 3-year and 10-year Note auctions at 1 pm.

Technicals: We have been cautious the euro and went Neutral in Bias after it slipped below the 1.16125 level last week. Although it was encouraging to see price action hold support at 1.1524, we remained Neutral last night. Today brought the much needed flush and recovery that has reinvigorated a bit of our Bullish Bias. We expect price action to test what is now major three-star support at ...

 

Yen (December)

Session close: Settled at .88905, down 3 ticks.

Fundamentals: The yen consolidated near the highs of yesterday’s jump. The Nikkei was down more than 1% overnight which kept a bid under the yen, however, it pared losses in U.S hours but the yen remained stable as Treasury prices rose. Monday night, Current Account data came in light, but Economy Watchers Index came in stronger than expected. Traders want to keep an eye on equity markets and if they slip further, the yen is looking to extend gains as the U.S dollar softened through today’s session. Machinery Orders are due at 6:50 pm CT.

Technicals: Price action remains firm but faces strong overhead resistance at .... 

 

Aussie (December)

Session close: Settled at .7105, up 22 ticks.

Fundamentals: The Aussie moved higher early last night after NAB Business Confidence beat expectations but followed equity markets around the globe lower into Tuesday morning. Things stabilized at the onset of U.S hours and the dollar softened; a perfect stew for the Aussie to gain half a penny from the session low into the electronic close. The tape is stable and seems to want to pick itself out of the gutter. Westpac Consumer Sentiment is due at 7:30 pm EDT.

Technicals: In yesterday’s report, we introduced a minor Bullish Bias as we felt and still feel the Aussie is primed to recovery. Still, it faces major three-star resistance at .... 

 

Canadian (December)

Session close: Settled at .77355, up 10 ticks.

Fundamentals: The Canadian turned a corner when at 8:00 am EDT, just as we described for the other currencies against the dollar. The comments from Dallas Fed President Kaplan and the onset of a risk-on sentiment as U.S hours approached lifted the Canadian because it sure was not the miss on Housing Starts for September or the revision lower for August. Crude Oil also provided a tailwind in the 0.5% rally from session lows as Hurricane fears added a premium. Tomorrow, Building Permits are due at 8:30 am EDT.

Technicals: Price action responded against major three-star support once again and this allowed the bulls to take the reins on the session. It is not ironic that the Canadian settled right at our pivot level, this is simply the beauty of technicals. The ground work is now laid, and the line is in the sand. We are upping our Bullish Bias, but traders must be out below .... 

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

Recorded: TradersExpo Chicago July 24, 2018.

Duration: 4:34.

 

 

 

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