Session close: Gained 30.5 ticks on the session settling at 1.2106
Fundamentals: The euro is at the highest level since September after a strong close to 2017 and start to 2018. Much of this move can be characterized by dollar weakness. Remember we have been hammering home the idea that the Federal Reserve will not tighten policy at a faster pace than already priced in, however, the pairs that the currency trades against, their central banks are likely to tighten at a pace faster than already priced in.
European Central Bamk members Nowotny and Coeure both eluded to the ECB allowing its bond purchase program to running out after its scheduled September 2018 end date instead of rolling it out once again. We believe that the market has only begun pricing this in. It’s a big first week of the year with ISM Manufacturing and FOMC Minutes tomorrow. But first we have Unemployment data from Spain due at 2:00 am CT and Germany at 3:00 am Central Ttme. Of course, the gem of the week is Nonfarm Payroll, but Eurozone reads on CPI and PPI on Thursday should not be overlooked.
Technicals: The Euro broke out above major three-star resistance at 1.20435 on Friday and extended gains to a high of 1.2135 today before settling back in. This breakout truly opens the door to the next major upside target of 1.2180-1.22135 and from there the Euro could really gather steam. What will be crucial for the bull camp at a minimum this week is to build a base above 1.20435, doing so will prime the currency for the next leg.
Resistance – 1.2180-1.22135****, 1.2434**, 1.2608***
Support – 1.20435***, 1.1976**, 1.1905-1.1931**, 1.1797-1.1799***
Session close: Gained 26.5 ticks on the session settling at .89405
Fundamentals: The Yen put in a strong session on U.S Dollar weakness despite higher U.S Treasury yields, equity prices and a strong read on Chinese Caixin Manufacturing. Right now, the Dollar is the dog and didn’t even get much of a bump on tax-reform, instead it merely paused the selling. There is no major data coming out of Japan this week and data out of the U.S will be critical for the trade; ISM Manufacturing is due at 9:00 am CT tomorrow and FOMC Minutes at 1:00 pm CT.
Technicals: On Friday, the yen nudged out a close above R1, and though it was not convincingly done, today’s hold against it and follow through gives the bulls what they needed. The session high ran right into .8957 before settling near the bottom end of that pocket. There is a trend line from the September high that comes in at .8930-.8937 and price action must maintain a close above here in order to keep the bulls in the driver’s seat. The nine-day moving average is trailing the 21-day and a continued close above the trend line will spark a cross of these moving averages and create further momentum.
Resistance – .8957**, .8984**, .9060-.9091***, .9164**
Pivot - 8930-.8937
Support – .8897-.8912**, .8847-.8862**, .8782-.8808***
Session close: Gained 19 ticks on the session settling at .7830
Fundamentals: The Aussie put in another session of gains, its 13th in the last 15. Strong Chinese Caixin Manufacturing and Aussie AIG Manufacturing last night helped the New Year start off on a positive note. Further boosting the Aussie was another strong session for the metals complex. Tomorrow will be very US Dollar centric for the trade.
Technicals: The Aussie stayed above the .78 mark for much of the session and faces critical three-star resistance about .5% higher. The market is overbought with an RSI now at 73.50 and is really due for a consolidation day or two lower. Bulls should take profits at this point and look to reenter a penny lower or after a health consolidation at and just below the .78 mark.
Resistance – .7799**, .7870-.7884***, .8000**, .8100***
Support – .7724-.7728***, .7711**, .7673***, .7636**, .7572-.7594**, .7498-.7501***, .7390***
Session close: Gained 13 ticks on the session settling at .8003
Fundamentals: The Canadian extended gains after breaking out above its two-month sideways consolidation late last week. Prices remain elevated on a weak dollar and strength in the Energy sector with crude above $60 per barrel. Tomorrow’s trade will revolve around the U.S. dollar but Thursday brings the RMPI read, Raw Materials Purchase Index which is a read on inflation, and Friday is Canadian jobs (along with U.S Nonfarm).
Technicals: Yes, the Canadian dollar is enjoying momentum from its bullish breakout, but the trade is essentially in overbought territory and due for a consolidation. Because of this we have begun to Neutralize our Bullish Bias. Bulls can still look for an upside target of .8022-.8044 but ultimately should be prudent and take something off the table ahead of a thick week of data from the United States and Canada.
Resistance – .8022-.8044**, .8085
Support – .79675**, .7932***, .7879-.7889**, .7865**, .7730-.7754***, .7671**, 7550***