The volatility following President Trump’s tweet on tariffs send currency traders towards safe haven writes Bill Baruch President of BlueLineFutures.com.

Euro (ECM)

Session close: Settled at 1.12435, up 8.5 ticks

Fundamentals: The euro pulled green just ahead of settlement for the first time on the session after opening lower Sunday night. Risk-sentiment across the board took a swift kick to the gut after President Trump tweeted Sunday he plans to raise tariffs on $200 billion worth of Chinese goods from 10% to 25% on Friday if no deal or progress has been achieved.

The dollar garnered some safe haven winds, pressuring the euro early in the session. With sentiment exacerbated on this fresh uncertainty, it was the economic calendar that helped stop the bleeding. Eurozone Services and Composite PMIs were revised higher and Sentix Investor Confidence and Retail Sales both beat. As U.S. hours unfolded, equity markets battled back, and the Russell 2000 small caps turned positive. With this weakness seemingly neutralized for now, we look to a crucial pair of reads from Germany tomorrow morning that will certainly set a tone on the session; Industrial Production and Factory Orders at 1:00 am CT. French Trade Balance is due at 1:45 am CT and EU Economic Forecasts are out at 4:00 am CT. From the U.S, we look to JOLTs Jobless Claims at 9:00 am CT. Today, the NY Fed’s Williams said he was not worried about a recession and Philadelphia Fed President Harker reiterated Chair Powell in that slow inflation is transitory. Tomorrow, we look to Dallas Fed President Kaplan at 6:00 am CT and Fed Governor Quarles at 10:35 am CT.

Technicals: Going back through the April 26 low, the euro has not settled below the 1.11845 mark which aligns to create major three-star support. This has buoyed the market and kept the bull’s technical value argument alive. Today’s recovery though faces its own headwind with major three-star resistance at 1.12455-1.12695. A continued close above here should provide a tailwind out above 1.13 at minimum.

Bias: Neutral

Resistance: 1.12455-1.12695***, 1.1311-1.1332**, 1.13855***

Support: 1.11565-1.11845***, 1.1000***

Yen (JPM)

Session close: Settled at .9046, up 15 ticks

Fundamentals: The good news is the yen finished positive. The bad news is it finished about 0.5% from its session high. Safe-haven assets ramped higher last night on fear after equity markets gapped lower on the open. But risk-sentiment stabilized at the onset of U.S hours on news that China is still sending an envoy to the U.S for trade talks this week. There is no major data out of Japan tonight, but traders should keep a pulse on German Industrial Production and Factory Orders tomorrow at 1:00 am CT which if very poor again could reinvigorate a bit of fear.

Technicals: At this level, we have no choice but to be neutral. The yen extended Friday’s gains overnight, getting out above the April 10 high but it failed to settle above the .90585 mark. Furthermore, strong resistance overhead begins with the June 200-day moving average at .9107.

Bias: Neutral

Resistance: .9107-.9130**, 91815***

Pivot: .90585

Support: .9001-.9031**, .8919-8931***, .88355**, .87675***

Aussie (ADM)

Session close: Settled at .7007, down 17 ticks

Fundamentals: It’s a big night for the Aussie with a deluge of news. Australian Retail Sales and Trade Balance are due first at 8:30 pm CT. Next up is the RBA policy meeting at 11:30 pm CT. The Aussie opened sharply lower last night on trade war fears following President Trump’s tweet. Remember, China is Australia’s number one trade partner. Price action battled back as some fears dissipated but this uncertainty gives the RBA no reason to shift an already dovish stance. However, we do not expect them to surprise sentiment with a freshly dovish rhetoric and what may be more important is simply the data from Australia tonight and from China as the week unfolds.

Technicals: Price action slipped hard on the open but pared losses through U.S hours. We are neutral given the data dump tonight. Minor resistance comes in at Friday’s settlement and a move above here should get legs to major three-star resistance at .7077-.7080. Watch key support aligning with previous lows and today’s low, a move below here would open the door for selling down to the January 3rd low.

Bias: Neutral

Resistance: .7024*, .7077-.7080***, .7132*, .7195-.7215***, .7307***

Support: .6970-6997**, .6825-.6861***

Canadian (CDM)

Session close: Settled at .74495, down 5.5 ticks

Fundamentals: The Canadian, like other risk-assets, grinded back near unchanged by the electronic close. Crude oil finished up 1% after checking the $60 mark but even continued strength in energies can only do so much for the Canadian; we have seen that all year. Keep a pulse on broader sentiment Tomorrow brings a pivotal Ivey PMI read.

Technicals: Price action is battling at major three-star support just above the .7400 mark. Volatility will continue and a close below support will open the door for another 1%. However, a moveout above .7500 should find a tailwind of buying at this suppressed level.

Bias: Neutral

Resistance: .7491-.7509**, .7544-7564**, .7600-.7630***

Pivot: .7443

Support: .7404-.7427***, .7330-.7347***

Bill Baruch provides technical levels on all markets throughout the week at BlueLineFutures.com