Session close (Monday, March 5): Settled at 1.23355, down 5.5 ticks
Fundamentals: All things considered, this was a very quiet session for the euro. The currency traded in a range of less than a penny in the face of a deadlocked Italian election, the formation of a coalition government in Germany and President Trump’s trade tariff talk. The Italian news, where two anti-establishment parties have claimed a share of victory, was largely offset by Germany paving a path forward from their own deadlock. As for Trump’s tariffs, major U.S. indices shook off the news and recovered with gains of more than 1%.
While there are potential red flags with these tariffs, we discussed how the news was exacerbated in last night’s Tradable Events this Week. The muted price action on the currency side is not only a tug-of-war between news out of Italy and German but as traders brace for a busy back half of the week with the ECB’s monetary policy meeting Thursday and a key U.S jobs report Friday. The euro did manage to finish green on the electronic session despite Services PMI, Markit Composite PMI and Retail Sales all missing while U.S. ISM Non-Manufacturing beat. Tomorrow’s economic calendar is quite bare, but traders should keep an ear to NY Fed President Dudley’s comments at 6:30 am CT.
Technicals: On Thursday evening’s FX Rundown we continued to back our Bullish Bias. Please sign up for a Free Trial at Blue Line Futures to view our entire technical outlook and proprietary bias and levels.
Session close: Settled at .94225, down 59.5 ticks
Fundamentals: The yen ripped higher late Thursday on comments from Bank of Japan Governor Kuroda that the central bank will begin a plan to exit their ultra-loose monetary policy at the start of their fiscal year in April 2019. This came on the heels of an uptick in equity market volatility and the yen traded to a fresh swing high of .9510. This spike was short lived as the dollar and equity markets stabilized to begin the week; major U.S. indices all gained more than 1% while the Nikkei extended gains to finish up more than 2%. There is a 30-year JGB auction tonight while the economic calendar is quiet in the lead up to GDP data Wednesday night and the BoJ meeting Thursday night. This will be a pivotal week for the yen as we discussed in yesterday’s Tradable Events this Week.
Technicals: Today’s failure against major four-star resistance has Neutralized our Bias slightly, especially in the near-term.
Session close: Settled at .7761, up 7 ticks
Fundamentals: The Aussie traded firm last night and stayed so into the morning on strong Building Approvals and Company Gross Operating Profits data. For both reads, especially the Building Approvals, this was a nice bounce back from an abysmal read last month. Ultimately the session consolidated higher ahead of a big night tonight; Retail Sales and Current Account data is due at 6:30 pm CT. The Reserve Bank of Australia also meets tonight and is their rate decision and policy statement is due at 9:30 pm CT; they are expected to leave things unchanged.
Technicals: The trade over the next 24 hours will be completely fundamental, however, the technical levels will work as bumpers.
Session close: Settled at .76955, down 59.5 ticks
Fundamentals: The Canadian is at the lowest level since July and has given back all of its rate-hike rally. The currency traded lower on Friday due to an annualized GDP miss and has seen further pressure as the next round of NAFTA talks get underway while the White House wants to impose tariffs on steel and aluminum. However, this is less about politics and more about a slowing Canadian economy; the data has been awful over the last 30 days and we now look to Ivey PMI tomorrow at 9:00 pm CT.
Technicals: The path of least resistance is lower and there is no fighting it.