Session close (Thursday, May 24): Settled at 1.1745
Fundamentals: Yesterday’s FOMC Minutes brought exactly the lightbulb moment we not only expected but discussed at length since their meeting earlier this month. The only problem, how poor Eurozone growth and sentiment data has been. Even though the Federal Reserve has telegraphed that they are willing to let inflation run past their 2% target without forcing a faster pace of rate hikes, the dollar remains elevated. With Italy in the headlines, German Business Sentiment at multi-year lows, inflation dissipating and fears on trade, the European Central Bank has blatantly begun to pull the reigns in on their hopes of tightening later this year. In the Minutes from the ECB Meeting at the end of April, officials showed concern that growth could slow further. Overall, their uncertainty has increased and seem more cautious.
Also, this morning ECB official Praet said the Eurozone economy is in good shape but added there are “clouds” and pointed to politics such as Italy. The bright spot here is that this was already known, the ECB Minutes did not affect the Euro much this morning. The better news, given we believe the Euro will strengthen as the year unfolds, is that markets are now pricing in that the Fed foresees its own concerns and uncertainty. In fact, Philadelphia Fed President Harker said that he sees no reason to force hiking unless inflation increases quickly, a slow grind higher in inflation should not force action. On the data front, German Climate fell just shy of expectations through a French Business Survey beat. Tomorrow’s German Ifo survey is the more critical read and is due at 3:00 a.m. Central. From the United States, weekly Jobless Claims came in higher than expected and Existing Home Sales missed. Tomorrow, we look to Durable Goods at 7:30 am CT and Fed Chair Powell at 8:30 am CT. ECB and Fed officials are on the calendar, but Powell will take the cake.
Technicals: The Euro failed to sustain the reversal from Monday’s low and traded down to 1.1696 early yesterday. Price action has continued to fish around at this level but ultimately has held major three-star support at... The FX Rundown goes out each evening, 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 .9162
Fundamentals: The Yen trade has been reinvigorated. Today, it finally settled back at the 200-day moving average after the White House canceled the Summit with North Korea. Yesterday morning, price action jumped as Italy, Turkey and the U.S./China trade deal were grabbing headlines. Now that all is not quiet, safe-haven assets have reemerged this week. Additionally, yesterday’s dovish Fed Minutes pulled down Treasury yields and U.S. dollar, which brought support to the Yen. Tokyo CPI data is due tonight at 7:30 pm CT. With Italy, North Korea, Turkey, China and much more are to cloud the landscape ahead of the long weekend, we could easily see continued support for the Yen. Still, Fed Chair Powell will be in the limelight at 8:30 am CT.
Technicals: Price action is hugging the 200-day moving average, a level that we said the Yen must close above in order to even consider positioning long. We are not getting ahead of ourselves just yet and want to see how tomorrow shapes up. However, a continued close above this level will put the ... The FX Rundown goes out each evening, 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 .7579
Fundamentals: Despite geopolitical headline risks, the Aussie has notched out a couple very constructive sessions. With nothing on the economic calendar to finish the week, the currency will firmly rely on the U.S dollar. Fed Chair Powell will certainly move markets at 8:20 am CT. Traders should also keep an eye on commodity prices and how they trade ahead of the long holiday weekend.
Technicals: Price action has held the pivot on a closing basis yesterday and today. Better yet, it has left two constructive tails. Still, the tape has not retested.
Session close: Settled at .77645
Fundamentals: The Canadian Dollar struggled to hold ground while crude oil retreated a dollar on the session and about two from its recent high. Additionally, NAFTA remains a headwind as skeptics crowd around the United States and China trade deal/talks they also believe NAFTA has become less likely. Last night, the White House announced it will investigate imposing a tariff on auto imports. All of this has weighed on Canadian and the tape is soft heading into the final session before a long weekend. There is no data out of Canada tomorrow, but traders should keep a close on the U.S Dollar and Crude Oil.
Technicals: In a sink or float market, the Canadian is sinking. If you want to buy something against the U.S Dollar, the Aussie now looks to be your best bet. Furthermore, we do not like being long the Canadian below ... The FX Rundown goes out each evening, please sign up for a Free Trial at Blue Line Futures to view our entire technical outlook and proprietary bias and levels.