Daily forex rundown: Euro, yen, Aussie & CAD

June 12, 2018 08:24 AM

Euro (June)

Session close (Monday, June 11): Settled at 1.1793, up 16.5 ticks

Fundamentals: This is the biggest week of the year and the euro started off on solid footing. It is still having difficulty getting through technical resistance but firm comments from Italian Finance Minister that they will not leave the Euro were supportive. Today’s economic calendar was bare outside of Industrial Production and Manufacturing data from the U.K. These both missed and while the Euro gained against the Pound, this data likely weighed on the Euro versus the Dollar just a bit as the session unfolded. French Non-Farm Payrolls are due at 12:30 am CT. German ZEW Economic Sentiment at 4:00 am CT will be a crucial read tomorrow, the last two months were the lowest since November 2012 and tomorrow’s read is expected to worsen. U.S. CPI is due at 7:30 am CTand all eyes must be on this. There is a 30-year Bond auction at noon CT and the Federal Budget balance at 1:00 pm CT.

Technicals: Price action has struggled mightily against first key resistance at 1.1834-1.1855. We remain Bullish in Bias, however, the recovery bounce has been achieved. This week’s direction will be very fundamentally driven, but the levels will be key when they are tested. 

Yen (June)

Session close: Settled at .9093 down 45.5 ticks

Fundamentals: The yen has been a casualty to record setting equity markets, rising yields and the belief that the Bank of Japan will be the odd one out this week who remains more dovish. Tomorrow’s U.S CPI could really set the expectations for the Fed on Wednesday while the ECB has already said it will discuss changing their policy statement to tape. The Bank of Japan though is set to leave things unchanged, however, if there’s one thing we’ve learned over the years, its that the Bank of Japan can easily surprise one-sided sentiment. First this week, President Trump meets with North Korean dictator Kim Jung Un this evening and any piece of bad news will encourage buying in safe-havens such as the yen. Additionally, equity markets have faltered after each FOMC Meeting this year, strong CPI data tomorrow will strengthen the dollar but as the week unfolds, a weaker equity market would also encourage buying in the Yen. Please do not get us wrong, we are not sitting here Bullish the yen, we are merely giving the many reasons the market seems to be discounting. Machine Orders data out of Japan last night blew out expectations. PPI data is due tonight at 6:50 pm CT.

Technicals: Today’s weakness was very much technical. Friday’s price action failed directly at major three-star resistance. 

Aussie (June)

Session close: Settled at .7605 up 4 ticks

Fundamentals: The Aussie was our #1 Tradable Event last week and if you followed us you surely had opportunities to capitalize. We remain long-term upbeat on the Aussie and believe there is tremendous room to the upside, in the long-term. First and foremost, the RBA is likely to hike rates rather than cut rates and once they telegraph a more hawkish policy shift in the coming months we should see the Aussie appreciate quickly. In the near-term though, this week will be extremely volatile. In a choppy trade we could see downward pressures if the Fed is more hawkish than expected and/or stocks sell off. Still, by the end of the week we believe the Aussie should have shrugged of such volatility; stay nimble. Tonight, Home Loans and Business Confidence are due at 8:30 pm CT.

Technicals: Price action is holding well at major three-star support. It struggled to move out above firs key resistance last week but as we said above we remain long-term upbeat.

Canadian (June)

Session close: Settled at .7701 down 31 ticks

Fundamentals: The G7 Summit went as one would have expected; little to no headway as President Trump kept his hardline stance on tariffs and fair trade. However, things got worse for the Canadian dollar after President Trump fired back at Prime Minister Trudeau for his comments on Trump’s trade stance. The currency quickly traded lower on Sunday night. Traders can also point to this weakness as a delayed reaction to a poor jobs report Friday on hopes of a better outcome from the G7. With nothing to write home about, the Canadian lost ground. The Bank of Canada is not participating in the central bank extravaganza this week and after such poor data last week, it’s a good thing for anyone thinking about buying; the bank could only be more dovish at this point. Tomorrow’s U.S data and price action in Crude iil will push the Canadian around.

Technicals: The Canadian has battled fairly well at the .7700 mark all things considered. We remain Neutral given how constructive this battle has been given the weak fundamentals. However, we could only make a case for being long above ...  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.