FX: Euro May Track UK Jobs. Yen Swings High. Aussie Shallow. CAD Solid

10/16/2018 10:01 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. 16 here.
Stocks surge higher Tuesday, S&P and Treasuries.

 

Euro (December)

Fundamentals: The euro firmed up overnight as recent tailwinds associated with soft U.S. CPI Thursday and Michigan Consumer Sentiment on Friday brought buyers to the table to start the week. However, those buyers noticeably exhausted themselves in a more or less quiet session with price action remaining contained below Friday’s high despite a poor read on U.S Retail Sales.

On another note, NY Empire State Manufacturing bettered expectations. Also holding the euro back has been continued skepticism on a Brexit deal as sides are deadlock with the Irish border.

Tonight, we look to inflation data from China and a stronger than expected read should bring support to risk-on assets, such as the euro. Traders should also keep an eye on UK Employment data at 4:30 am EDT, the euro is likely to track the pulse of this read.

The highlight of tomorrow morning will be German ZEW Sentiment data at 5:00 am EDT. Sentiment turned sharply lower after the February stock selloff and was dragged lower due to the Syrian conflict which was followed by Italy and tariffs.

July German ZEW Sentiment was the worst read since August 2012, but it has since attempted to crawl out of the gutter and has beaten expectations over the last two months though still at a low level. This read will certainly set a tone for the session. U.S. Industrial Production is at 9:15 am EDT and newly appointed San Francisco Fed President Daly speaks at 4:15 pm EDT.

Technicals: The good news is that price action has remained constructive at and above what was major three-star resistance at ...

 

Yen (December)

Fundamentals: The yen has seen continued support due to increased equity market volatility and today traded to the highest level since September 18. The Nikkei cut losses by more than half, but the global-risk picture certainly remains questionable and this should keep the yen elevated.

Tonight, Chinese inflation data will move the yen and a better than expected read will encourage a favorable risk-on environment, bad for the yen.

Tomorrow’s European Sentiment will also be crucial and overall if we see confidence erode along with the equity market, the yen will benefit.

Technicals: The yen extended to a new swing high early in the session but faces major three-star resistance overhead at .... 

 

Aussie (December)

Fundamentals: The Aussie has seen favorable but unenthusiastic price action. Late last week, in our FX Rundown video, we said that we are now Bullish in Bias on the Aussie as we factored in positive news on the U.S and China trade front along with a line in the sand for risk management. U.S equity markets slipped into the close and considering the Aussie’s shallow rally, the risk-on sentiment appears much less favorable than last week.

Adding to an uncertain landscape is the release of the RBA Minutes at 8:30 pm EDT and inflation data from China at 9:30 pm EDT.

Technicals: The fundamental landscape has failed to produce a hopeful tailwind but capping any perspective rallies has been major three-star resistance at ... 

 

Canadian (December)

Fundamentals: The Canadian posted a solid session led by stronger than expected business optimism. Remember, the Bank of Canada is truly the only other major central bank to embark on a hiking cycle and upbeat sentiment certainly heightens the probability of a rate hike over the next three or four months. The overall data has failed to find consistency but emerging from a new NAFTA deal, we imagine this begins to pick up.

However, traders should hold some caution considering the soft footing that equity markets find themselves, we otherwise would be much more positive on the Canadian.

Technicals: Price action held the previous swing low at .7656, this is first key support. The tape has showed a desire to be constructive with higher lows over the last two sessions. Still, we want to see a close above first key resistance at ... 

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Bill Baruch’s Midday Market Minute short video for Oct. 15 here.

Stocks, oil and gold mixed to start the week Monday, says Bill Baruch, founder & president of Blue Line Futures. S&P starts to putter. Market struggles with 200-DMA. Watch 2753. Profit taking Crude.

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

Recorded: TradersExpo Chicago July 24, 2018.

Duration: 4:34.

 

 

 

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