Session close: Settled at 1.1953 and gained 31.5 ticks
Fundamentals: The Euro put in another strong session today and this comes despite U.S tax-reform getting signed into law and the strongest Existing Home Sales read in the United States in 11 years. This is also on the heels of German PPI falling just shy of expectations early this morning. Yes, we are surprised that the Dollar hasn’t managed to gain anything on the Euro today but that doesn’t matter because we are and have been Bullish the Euro. This movement signals a greater force at work and as we have been saying this week, the move in German bund yields cannot go unnoticed. There is no data out of Europe tomorrow morning but data out of the United States just gets started on the week. The final read on Q3 GDP and Philly Fed Manufacturing are due at 7:30 am CT. Friday is what we have had circled on our calendar with Durable Goods, PCE and Personal Income and Spending all due early.
Technicals: Price action traded to a high of 1.1976 today and fell just shy of major trend line resistance from the September high that comes in at 1.1990-1.1998. It is no surprise see this technical level hold heading into a gauntlet of U.S data over the next two days with longs taking some profit off the table. The 1.1946-1.1949 level will be out pivot heading into tomorrow; this will be key for the Euro to maintain much of its price action above here to keep the bulls with a firm upper hand. Major support now comes in at 1.1903-1.1913 and not only is this today’s low but the 100-day moving average and a key retracement; and a close below here and 1.1885 is needed to signal a failure and a retest to major three-star support.
Resistance – 1.1998**, 1.20435***, 1.2180-1.22135****
Pivot - 1.1946-1.1949
Support – 1.1903-1.1913**, 1.1885**, 1.1854*, 1.1797-1.1799***, 1.1742**, 1.16485***
Session close: Gained 28.5 ticks and settled at .78075
Fundamentals: We believe today’s reversal is more of a technical move off recent lows and our major three-star support. However, this also does not disagree with our long term bearish U.S Dollar thesis. In fact, if tax-reform was merely holding the U.S dollar up, this was a very poor buy the rumor sell the fact and should open the door for tremendous first quarter weakness in the U.S Dollar. The Toronto Stock Exchange set a record high today and Crude Oil is back above $58, both have seemingly supported the Canadian as well through today’s session. Another way of looking at today’s move would be to say that the bears are taking profit ahead of a huge day of data for Canada. ADP Employment, CPI and Retail Sales are all due tomorrow morning at 7:30 am CT.
Technicals: Major three-star support was tested and held. Price action has rejected the Pac-Man and is now more than half a penny from there. This triple bottom coupled with strong data out of Canada tomorrow could set up for a very strong finish to the week. There is now a trend line from the September highs coming in at .7850 and a move out above there could be just getting the ball rolling.
Resistance – .7850-.7858**, .78795**, .7931-.7959***, .8022**
Support – .7730-.7754***, .7671**, 7550***
Session close: Settled at .8863, down 39 ticks
Fundamentals: Tonight is what all Yen traders have been waiting for with the Bank of Japan holding their policy meeting in the later hours; they never give the exact time of an announcement and it depends how their meeting runs. As we discussed last night, the selling in the Yen has come for a number of reasons this week; global yields rising, Kuroda’s firm hand and yes tax-reform (which the strength cannot be seen in the Dollar Index due to Euro strength for Euro reasons). It seems here that the bulls are afraid to position and the bears and algos are pressing it lower; no one believes they will change their policy stance, holding firm on crisis-mode stimulus until their inflation target of 2% is reached. However, we have heard a few from their nine-member board speak up about diminishing returns from this open-ended stimulus plan. If the policy statement even shows any potential of tapering back with the rest of the world, the yen would be in store for a very strong finish to the week.
Technicals: Price action has a bullseye for the trend line support at .8855 that we discussed last night. The session low today comes in at .8859. Traders must watch this key level into the meeting tonight and recent lows at .8840 into the end of the week. A rejection from this area would set the Yen up for a very nice year end rally.
Resistance – .8902-.8909**, .8937-.8957**, .8984**, .9060-.9091***, .9164**
Support – .8855**, .8840**, .8782-.8808***
Session close: Settled at .7660, up 3 ticks
Fundamentals: The Aussie is consolidating in a much quieter week this week than last, especially now that we got through Monday’s RBA Minutes. Today’s inside session is very healthy for an upward bias but it also signals the Aussie’s dependence on U.S data to close out the week.
Technicals: Price action continues to hug the 200-day moving average during its very constructive consolidation. Major three-star resistance still sits out above, and we would need a much weaker U.S Dollar to break out above here in the near-term. However, in the longer run, as we said last night we might have a multi-month low in for the Aussie through the first quarter. Lower price action that holds first support should present a tremendous buying opportunity.
Resistance – .7670**, .7724-.7728***, .7799**, .7870-.7884***
Support – .7636**, .7572-.7594**, .7498-.7501***, .7390***