Daily forex rundown: Euro, yen, Aussie & CAD

July 11, 2018 09:56 AM

Euro (September)

Session close: Settled at 1.1808, up 4 ticks

Fundamentals: The euro flattened out early gains as the pound dropped a penny on Brexit uncertainty at 8:30 a.m. Central. While the pressure bled into the euro, we do find this move a bit more technical than fundamental. The paring also occurred when ECB President Mario Draghi began speaking; he was upbeat on the economy and the positive effects of quantitative easing. He pointed to the prominent risk currently being trade protectionism and said that the EU should “lead by example”. This morning, German Trade Balance data was positive with Exports and Imports coming in stronger than expected and the Eurozone Sentix Investor Confidence also beat. The euro began a strong move in the latter half of last week on the heels of comments from ECB officials firming up the time frame for the first rate hike to September of next year from December. The currency then gained 0.55% on soft wage growth on the U.S Nonfarm Payroll report. Tomorrow, we look to a critical read on German ZEW Economic Sentiment at 4:00 am CT and U.S JOLTs Job Openings at 9:00 am CT. We encourage you to read Sunday’s Tradable Events this Week to get a good idea on how this week sets up. 

Technicals: Price action stalled this morning directly at first key resistance at 1.1858. While it consolidated lower into the close, this was constructive holding above the...  Please sign up for a Free Trial at Blue Line Futures to view our entire technical outlook and proprietary bias and levels.


Yen (September)

Session close: Settled at .9066, down 31 ticks

Fundamentals: The yen traded sideways into the NYSE bell this morning after gaining some ground on Friday due to a weaker Dollar on Nonfarm Payroll. The currency held arguably well overnight despite the strong risk-on move in equity markets; the Nikkei and Hang Seng both gained more than 1%. Sunday night’s quiet trade came along with an upbeat economic assessment from the Bank of Japan on all nine regions. BoJ Governor Kuroda reemphasized they will maintain their ultra-loose policy until inflation hits their 2% target. However, there seemed to be concerns as to a tightening labor market and what it could do to business activity. The currency did not hold through this morning’s bell and when U.S equities legged higher, this added direct pressure to the yen. There is no major economic data out of Japan tonight.

Technicals: After falling shy of minor resistance, price action traded down to first key support at .90515-.9073. We remain neutral.

Aussie (September)

Session close: Settled at .7468, up 40 ticks

Fundamentals: While the Aussie has been a casualty to trade tensions, it has benefited from those fears being kicked to the sidelines. The Aussie has gained 1.2% since Thursday’s settlement. A soft U.S dollar, strong global equity markets and firm commodity prices have all contributed to the Aussie’s gains since the United States and China trade tariffs went into effect Friday morning. Tonight, NAB Business Confidence is due at 8:30 p.m. Central. Chinese CPI and PPI are also due then. 

Technicals: Price action closed above major three-star resistance today and this should technically encourage fresh buying as we stated on Thursday night’s FX Rundown. Traders should wave caution to the headlines, but we are now officially reintroducing a slight Bullish Bias that was in place Friday after Nonfarm Payroll and will remain such as long as the Aussie continues to close above ...  Please sign up for a Free Trial at Blue Line Futures to view our entire technical outlook and proprietary bias and levels.

Canadian (September)

Session close: Settled at .7637, down 4 ticks 

Fundamentals: More jobs were created than expected on Friday’s Canadian jobs report. However, the participation rate ticked up and this led to a higher Unemployment Rate (6.0% vs 5.8%). Furthermore, a key read on Ivey PMI missed by a tenth. All things considered, the Canadian has held ground well but may not have capitalized as well as it could have in this 48-hour risk-on environment. The Bank of Canada meets on Wednesday and is expected to raise interest rates, their verbiage will be key. 

Technicals: Price action is trading near major three-star resistance at ...  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. Bill has more than a decade of trading experience and focuses on developing trading strategies for both long and short-term trading approaches. Prior to Blue Line, Bill was the Chief Market Strategist at iiTRADER.  Bill is a featured expert on CNBC, Bloomberg and the Wall Street Journal as well as other top tier publications.