Session close, Thursday, Dec. 28: Settled above 1.20 up about 35 ticks
Fundamentals: The Euro has put in a strong session powering through trend line resistance on U.S dollar weakness. The European Central Bank released its Economic Bulletin early this morning and was upbeat at inflation rising gradually though monetary stimulus is needed through September 2018 or longer to secure inflation near its 2% target. Much of this did not come as a surprise but sometimes we can get little tidbits on these releases that favor a certain bias. In this case it has added a bid to an already strengthening Euro. U.S. weekly Jobless Claims and Goods Trade Balance missed expectations. The Euro traded to 1.2014, the highest level since Dec. 1, before settling back in near the psychological 1.20 level at the end of the day. Import data is due out of Germany tomorrow morning at 1:00 am CT, Spanish CPI at 2:00, Italian PPI, Eurozone M# Money Supply and Private Sector Loans at 3:00.
Technicals: Price action powered through trend line resistance from the September high and has held this level through the entire session. The 14-day RSI has also risen to 61 and is nearing overbought territory. First minor support will come in at 1.19785-1.18835 while key support on a pullback to watch is 1.1955-1.1963 and if this level holds, the Euro will stay in an immediate term uptrend.
Resistance – 1.2018*, 1.20435***, 1.2180-1.22135****
Support – 1.19785-1.19835*, 1.1955-1.1963**, 1.1905-1.1931**, 1.1848-1.1858*, 1.1797-1.1799***
Session close: Gained about 15 ticks
Fundamentals: Consistently strong data out of Japan has helped the yen lift itself a bit off the ground. Though this is a positive development for us long term bulls, the lack of a stronger rally is disappointing given the data coupled with U.S dollar weakness and a relief in treasury yields. Industrial Production bettered expectations last night while Retail Sales beat handedly. There is no fresh data out tonight or tomorrow from the United States to move the trade. Chinese Manufacturing is due out over the New Year’s weekend.
Technicals: As discussed above, though price action has been in the positive, the rally has been lackluster. We remain long term bullish and thing there is a strong move right around the corner. However, first major resistance is keeping price action in check and this will be key to watch finish out the week; a close above here tomorrow will spark short covering into the long holiday weekend.
Resistance – .8897-.8912**, .8937-.8957**, .8984**, .9060-.9091***, .9164**
Support – .8847-.8862**, .8782-.8808***
Session close: Gained nearly 20 ticks on the session
Fundamentals: Chinese demand and the global reflation trade is driving the resurgence in the Aussie Dollar which has now been up in 11 out of the last 13 sessions. Strong Chinese demand in 2018 coupled with higher import quotas in 2018 has driven copper prices to the highest level since February 2014. This has been a quiet week for data out of Australia but tonight we have Private and Housing Credit reads.
Technicals: The 14-day RSI is officially overbought trading above 70 today. Just a week and a half ago we said that it feels like the low in the Aussie through the first quarter was put in. This type of strength cannot go unnoticed and pullbacks should present buying opportunities. We only have a slightly Neutralized Bullish bias due to it trading in overbought territory. The first test back to previous major three-star resistance which is now major three-star support at .7724-.7728 should be bought and risk a stop through a close below the 200-day moving average at .7675.
Resistance – .7799**, .7870-.7884***, .8000**, .8100***
Support – .7724-.7728***, .7711**, .7673***, .7636**, .7572-.7594**, .7498-.7501***, .7390***
Session close: Gained more than 40 ticks on the session
Fundamentals: The reflation trade is driving all commodity based currencies and the Canadian put in a strong session on higher metals and energy prices. The Polar Vortex across the U.S and Canada has also helped energies put in a strong week. Furthermore, due to pipeline outages in the North Sea and Libya, Crude Oil is trading near $60, the highest since June 2015. There is no data out of Canada ahead before the end of the year.
Technicals: The Canadian is a buy now that it has broken out above its two-month sideways consolidation with a close above major three-star resistance at .7931-.7959. Still, the 14-day RSI is pushing near overbought territory and instead of chasing price action, traders can look for a retest to .7932 as the buy (marked as major three-star support though this is not a true level and is more key on a closing basis for the week). A close below S2 would negate the trade and recent strength.
Resistance – .8022-.8044**, .8085
Pivot - .7959
Support – .7932***, .7879-.7889**, .7865**, .7730-.7754***, .7671**, 7550***