Session close (Monday, April 16): Settled at 1.24375, up 48.5 ticks
Fundamentals: The euro opened the week on a strong note, recovering back to last week’s high near the 1.2450 mark. Price action moved sharply higher on the European open at 2:00 am CT and saw further gains as the U.S. dollar weakened on frothy data and a tweet from President Trump that pointed to Russia and China devaluing their currencies. ECB official Praet was very upbeat on the Eurozone economy saying that “monetary policy measures are bearing fruit, and the growth outlook confirms our confidence.” He added that inflation should make its way to 2% but emphasized stimulus is necessary.
While upbeat on growth, his comments surely stopped short of being hawkish. Dallas Fed President Kaplan said he expects the Fed to raise interest rates three times this year and further next year, but these levels could begin too slow growth. Monday’s have been friendly to the euro with March 5th being the last time the Euro settled negative to start the week. Tomorrow brings Italian CPI at 3:00 am CT and German and Eurozone Sentiment data at 4:00 am CT. From the U.S Building Permits and Housing Starts are due at 7:30 am CT. Industrial Production is at 8:15 am CT. San Francisco Fed President Williams speaks at 8:15 am CT, Fed Governor Quarles at 9:00, Philadelphia Fed President Harker at 10:00, Chicago Fed President Evans at 12:10 and Atlanta Fed President Bostic at 4:40 pm CT.
Technicals: Today was quietly the highest settlement in the Euro since March 27th. Price action finished out above first key resistance and this comes on the heels of a solid hold on Thursday and constructive consolidation to finish out the week. We have minor resistance overhead against ... 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 .93755, up 29 ticks
Fundamentals: The yen opened lower last night in a risk-on environment as traders had the whole weekend to digest the Friday night strikes on Syria. With no blowback or escalation from Russia, safe-haven demand was reduced upon the open. This changed quickly for the yen for three reasons. First, the dollar weakened as the session unfolded; Retail Sales barely recovered, and NY State Empire Manufacturing missed. Second, President Trump’s tweet that Russia and China are devaluing their currencies reintroduced some risk-premium. Third and maybe most importantly, ultra-dovish Bank of Japan Deputy Wakatabe said he was happy with the current pace of easing. This may not seem drastic but the Deputy, who joined the board last month, was expected to push a more accommodative agenda. Instead, he addressed that if inflation rises sooner than expected, the Bank has the “tools to deal with it”. We are not the only ones that believe inflation will surprise to the upside in Japan.
Technicals: While some may have gotten nervous that the yen on Friday traded to the lowest level in two months, reading the forex Rundown you would understand that this was the inevitable test to major three-star support and the hold here is now bullish. Price action has recovered firmly through today’s session and now faces major three-star resistance.
Session close: Settled at .7781, up 19 ticks
Fundamentals: The Aussie posted a solid session on U.S. dollar weakness. Commodities in the metals sector performed well today and this added further support to the focused currency. Last night's data will be extremely pivotal to the trade as RBA Minutes are due at 8:30 pm CT and will be followed by a string of highly critical Chinese data. At 9:00 pm CT China GDP, Industrial Production, Fixed Asset Investment and Retail Sales are due.
Technicals: The bull flag that we referenced last week did encourage a strong spike in the Aussie, however, price action failed to settle out above major three-star resistance.
Session close: Settled at .79675, up 28.5
Fundamentals: This is a crucial week for the Canadian with the Bank of Canada meeting on Wednesday. Though they are expected to keep rates unchanged because of NAFTA, their tone will be key. All NAFTA parties walked away from the Summit of the Americas with the idea a NAFTA deal could be done in a matter of weeks. However, there is division on some key issues. The Canadian dollar has performed well recently as it is believed a deal is closer and because of strength in commodities and weakness in the U.S. dollar. Foreign Securities Purchased data along with Manufacturing Sales is due tomorrow at 7:30 am CT
Technicals: Price action finished right at minor resistance and continues to climb steadily. Our Bias remains outright Bullish and the tape is setting up for another bull flag breakout.