Bill Baruch President of BlueLineFutures.com, breaks down the fundamentals in the foreign exchange market.
Euro (ECM)
Session close: Settled at 1.1310, up 27 ticks
Fundamentals: The euro dove below 1.13 for the third instance since the beginning of March but prices were buoyed through U.S hours today after Chicago Fed National Activity and Existing Home Sales both missed.
Europe was closed for Easter Monday Holiday and the volume was overall light. A sharp increase in the price of Crude after the White House announced it will not renew waivers on sanctions for importing Iranian oil helped lift risk-sentiment across commodities and we don’t doubt that this helped lift the euro at least a bit. The otherwise quiet start to the week continues tomorrow and Eurozone Consumer Confidence is due at 9:00 am CT. New Home sales and Richmond Fed Manufacturing are due from the U.S at 9:00 am CT.
Technicals: Major three-star support at 1.1362 won the battle last week but with major three-star support at 1.12455-1.12695 holding, it has not won the war… at least yet. Although price action is lifting today, the tape remains extremely vulnerable to do another lower peak. First resistance comes in at 1.1320-1.1333 and a failure to trade out above here though tomorrow will encourage another wave from the bear-camp.
Bias: Neutral
Resistance: 1.1320-1.1333**, 1.1362-1.13855***, 1.1412-1.1428**, 1.1460-1.1480**, 1.1522-1.1549***
Support: 1.12455-1.12695**, 1.11845-1.1213***
Yen (JYM)
Session close: Settled at .89735, up 3.5 ticks
Fundamentals: The Japanese yen traded in less than a 10-tick range today as much of the world was on holiday and there was no data. Overall, risk-assets finished stronger which pressures the yen, but the U.S. dollar lost some ground which offset such. The market remains fundamentally and technically weak. Japan Manufacturing PMI is due at 7:30 pm CT and Bank of Japan Core CPI is due at midnight.
Technicals: Only a close back above .8991-.9002 will neutralize recent weakness, although this will not eliminate the downtrend. Major three-star support comes in at .8919-.8931 and with the U.S. Dollar Index contained due to inconsistent and unflattering U.S. economic data, there has not been a catalyst to drive the yen through this crucial support.
Bias: Neutral/Bearish
Resistance: .8991-.9002**, .9064-.90785**, .9109-.9130**, 91815***
Support: .8919-8931***, .88355**, .87675***
Aussie (ADM)
Session close: Settled at .7144, down 2 ticks
Fundamentals: Weakness in the Aussie dollar from the highs on Friday carried into this week but the currency held ground. And it did so despite unfavorable news in the form that China is likely to reduce stimulus efforts amidst their economy firming-up. Overall, it was a quiet holiday session. Tonight, we look to Manufacturing and Services PMI data at 6:00 pm CT
Technicals: We were Bullish one week ago and price action ran headfirst into our major three-star resistance target at .7217-.7227. We went outright Neutral after such on Wednesday but there is strong support at .7117-.7130 and the uptrend is still intact above here.
Bias: Neutral
Resistance: .7217-.7224***, .7307***
Support: .7117-.7130***, .7052-.7063*, .7006-.7014***
Canadian (CDM)
Session close: Settled at .7504, up 24 ticks
Fundamentals: The Canadian was lifted by crude oil gaining more than 2%. This was just another meager gain for the currency piggybacking tremendous gains for Oil. We maintain the belief that the Canadian’s failure to sustain gains in a Crude bull market really exemplifies its internal weakness and therefore we continue to hold a negative bias.
Technicals: Price action is back above the .7500 mark and this works to neutralize the immediate edge. However, we still hold an overall slight Bearish Bias until the Canadian closes out above .7544-.7564.
Bias: Neutral/Bearish
Resistance: .7544-7564**, .7600-.7630***, .76595**
Pivot: .74945-.7500
Support: .7476**, .7427-.7443***, .7330-.7347***
Bill Baruch provides technical levels on all markets throughout the week at BlueLineFutures.com.
