Daily forex rundown: Euro, yen, Aussie & CAD

Euro (March)

Session close (Wednesday Feb. 7): Settled at 1.23055, down 118.5 ticks

Fundamentals: The euro put in its worst session since October as Federal Reserve Presidents Kaplan and Dudley brushed off recent equity market volatility and implied the Fed is on track to hike at its next meeting. Yesterday, St. Louis Fed President Bullard did much of the same. Chicago Fed President Evans who dissented in December said the Fed should hold off on hiking until this summer which for the most part, was expected. San Francisco Fed President Williams predicts a gradual pace of interest rate increases. The euro began seeing pressure early this morning which ironically was after a German coalition was formed.

The strong selling did not kick in until after Dudley and when technical levels were breached. Tomorrow is German Trade Balance data at 1:00 am CT. ECB Economic Bulletin is due at 3:00 am CT. We expect volatility due to the Bank of England’s interest rate decision at 6:00 am CT, they are expected to leave rates unchanged. Philadelphia Fed President Harker speaks at 7:00 am CT, weekly Jobless Claims are due at 7:30and Minneapolis Fed President Kashkari speaks ay 8:00.

Technicals: The euro went south today with a session high right at our 1.2434-1.2436 level. This is a good thing as it edges closer to where we want to reenter long. Please sign up for a Free Trial at Blue Line Futures to view our entire technical outlook and proprietary bias and levels. 

 

Yen (March)

Session close: Settled at .9161, down 6 ticks

Fundamentals: The Yen did surprisingly well today in the face of a strengthening Dollar. Tonight, Bank Lending, Current Account and Foreign Bond Buying is due at 6:00 am CT. BoJ Board Member Suzuki speaks at 7:30 pm CT and Kuroda speaks at parliament shortly after midnight. Tonight, there is also a JGB auction. Chinese Trade Balance is due around midnight and this will be interesting to the risk trade as equity markets finished the session on weak footing. This is something to watch for that could bring buyers to the Yen.

Technicals: Price action remained contained within the weekly range through today’s session. We continue to believe that a strengthening Dollar from oversold territory will weigh on the Yen. Please sign up for a Free Trial at Blue Line Futures to view our entire technical outlook and proprietary bias and levels.

 

Aussie (March)

Session close: Settled at .7842 down 61 ticks

Fundamentals: The Aussie finished lower for the eighth straight session. Fundamentals and technicals combined have taken the wind out of its sails. We have maintained for nearly a month now that this rally was overdone, and the fundamentals truly did not back the pace at which we saw it increase. Tonight, NAB Quarterly Business Confidence is due at 6:30 pm CT. Chinese Trade Balance will critical tonight and is due shortly before or after midnight. If you have followed our Bearish Bias, a session like today is a good time to lock in some profits.

Technicals: Another weak session for the Aussie is in the books. We began Neutralizing our Bias yesterday as it tested into major three-star support. Please sign up for a Free Trial at Blue Line Futures to view our entire technical outlook and proprietary bias and levels.

 

Canadian (March)

Session close: Settled at .79575, down 32.5

Fundamentals: Crude Oil and a strengthening U.S Dollar weighed on the Canadian. Oil inventories built for the second week in a row while 332,000 bpd in production was added. Crude traded through a key $63 level and further pressures will keep Canadian buyers on the sidelines. Housing Starts are due tomorrow at 7:30 am CT and BoC Governor Member Wilkins speaks at 11:45. Friday is the big employment report out of Canada.

Technicals: Price action traded to a low of .7953 today and is working towards our major three-star support. Please sign up for a Free Trial at Blue Line Futures to view our entire technical outlook and proprietary bias and levels.

About the Author

Bill Baruch is President and founder of Blue Line Futures, a leading futures and commodities brokerage firm.