Month: January 2018

BrokersEDGE Futures trading News 1-8-18

E-mini S&P (March)

Last week’s close: Settled at 2742.50, its third record high close in a row.

Fundamentals: Equity markets have picked up this week right where they left off last. Most major European indices are up more than .33% while the Nikkei is up nearly 1% (futures which saw some of these gains on Friday are up nearly .5%). Friday’s read on Nonfarm Payroll showed steady job growth and though much less than expected, last month’s revision higher helped the overall read. Average Hourly Earnings came in at a respectable +.3% MoM and overall this is not a report that is going to encourage the Fed to tighten policy faster than already priced in. Data out of Europe this morning that included Business Confidence and Retail Sales was superb. Fed speak and reads on inflation will be the highlight. Fed president Bostic speaks at 11:40 am CT, Williams at 12:35 pm CT, and Rosengren at 3:00 pm CT. The Russell 2000 took out its all-time high last night before retreating, this will continue to be a concern of ours and we will watch this closely.

Technicals: The S&P gained 2.5% in the first week of the year and we remain Bullish though introducing some slight Neutrality as price action is due to take a breather for a session or two. Yes, we refrained from an outright trade recommendation in the second half of last week once our target of 2728.75 was hit, but our levels and Bias continue to work. From Friday’s levels price action achieved and settled near R1 and extended to hit R2 Sunday night. Our next major upside target is 2759.25, we have made this major three-star resistance. However, as for an outright recommendation, we would like to be buyers closer to what is now major three-star support at 2728.75. The NQ is also in a breakout trade, we put out a target of 6707 last week. The small caps Russell 2000 continues to concern us, and is a factor in waiting for a pull back in the S&P before recommending stepping in. Last night it traded to a new all-time high of 1565.9, but has since failed to hold ground, key support levels to watch here are 1557, 1551-1552 and then major three-star support at 1543.

Bias: Bullish/Neutral

Resistance – 2747.75**, 2759.25***

Pivot – 2740.50

Support – 2728.75***, 2718.25*, 2708.50-2711**, 2698.25-2700***

 

Crude Oil (February)

Last week’s close: Settled at 61.44, the highest weekly close since December 2014

Fundamentals: Prices are edging up into this morning after Baker Hughes reported a drop in U.S Oil Rigs Friday afternoon from 747 to 742. Unrest in Iran continues to take center stage as it has led to speculation that the U.S could use this as another reason to withdraw from the nuclear deal signed in 2015. Doing so will further tighten supply with the interesting factor being OPEC’s reaction regarding the current production cap. Though an official decision might not come until July, every three months the president must waive sanctions. The last deadline was October 15th, and the next is right around the corner.

Technicals: Friday’s weekly settlement was the highest since Oil plummeted in Q4 2014. Last week’s swing high of 62.21 fell shy of our resistance mark and the May 2015 highs at 62.58. From here, we introduced a Bearish Bias in order to begin positioning for a consolidation lower this week at minimum. Price action traded to a low of 61.09 on Friday, testing into S2 before moving back north. We are watching the 61.79 level today which was edged this morning. However, it will be more critical on a closing basis and the bulls look to settle prices out above here in order to regain the immediate-term upper hand.

Bias: Bearish/Neutral

Resistance – 61.79**, 62.21**, 62.58**, 63.39**, 66.87***, 68.43**

Support – 61.37**, 61.11**, 60.85**, 59.87-59.96***, 58.97-58.99***

 

Gold (February)

Last week’s close: Settled at 1322.3, the highest since September 15th

Fundamentals: In a choppy Nonfarm Payroll session, Gold came out a winner on the day gaining 60 cents. Headline job growth fell largely short of expectations at 148k vs 190k, however, a revision higher from the previous month of 24k helped chip into some of it. Average Hourly Earnings were a respectable +.3% MoM and met expectations, however, last month was revised a tenth lower to +.1%. In a seasonally bullish time of year for the metal, bulls should walk away satisfied. Today, Fed president Bostic speaks at 11:40 am CT, Williams at 12:35 pm CT, and Rosengren at 3:00 pm CT.

Technicals: Gold remains about as constructive as you can get and by maintaining a close above 1317 it has left the bulls with the clear upper hand. We remain immediate term Bullish until a close back below major three-star support at 1302-1303.4. However, we are beginning to be concerned that much of the bull camp has already positioned, with the net-long position at the highest since the 21:1 on the week ending November 28th. Still, it is only at young but mature 8.5:1. While some longs may have added late last week, we believe this read still eludes to upside potential on a technical basis.

Bias: Bullish

Resistance – 1323*, 1335.8**, 1358-1365***

Support – 1317-1317.2**, 1314.6-1314.8**, 1302-1303.4***, 1292.9**, 1279.5***

 

Natural Gas (February)

Last week’s close: Settled at 2.795

Fundamentals: With a storm being dubbed the “Bomb Cyclone” bitter cold temperatures reinvigorated Natural Gas prices to start the year. Not so fast, prices in the front month February contract finished the week 10% from the high on the first trading day of the year. As we discussed last week, the cold temperatures that not only spread across the northeast but as south as Texas and Florida can also have a two-sided effect. When schools and factories are shut down, demand also drops. Cash Natural Gas, saw a meteoric rise, one that was only felt in a minor fashion in the futures before disappearing altogether by Friday. Prices have edged higher into this morning but if a storm like this cannot keep futures above $3, then what will?

Technicals: Our Bias began to turn Neutral last week when prices failed to hold $3. Friday’s low of 2.746 and settlement did hold first key support at 2.734-2.7664 which has helped encourage a bounce this morning. The key level to watch today is 2.88-2.887, this is first resistance, a key retracement, Friday’s high and Thursday’s settlement. We are now introducing a slight Bearish Bias and believe if prices stay below this first key level, the bears will take it lower once again. Remember, we are expecting a record storage draw this week between -325 and -340, but this is already priced in.

Bias: Neutral/Bearish

Resistance – 2.88-2.887**, 2.9215**, 2.9415**, 2.963**, 3.00-3.01***, 3.108-3.145**

Pivot – 2.795

Support – 2.734-2.7664**, 2.562***, 2.486-2.522****

 

10-year (March)

Last week’s settlement: Settled at 123’15

Fundamentals: Strength in the global equity market has brought cash off the sidelines to further support momentum and this has kept a heavy tape in the treasury complex. Friday’s Nonfarm Payroll report as we discussed above was not something that would force the Fed to tighten policy at a faster pace. We believe Friday’s weakness is a direct correlation to global equity markets extending record gains. This can be seen even closer this morning as the S&P peeling back just a slight bit has brought in some support for treasuries. This week will be all about Fed speak and reads on inflation Thursday and Friday.

Technicals: We were Neutral last week as prices were depressed. However, we are introducing a slight Bullish Bias as we believe there is value in the lower half of 123. Key support at 123’10-123’13 has remained sticky and has kept price action in check. First resistance comes in at 123’215. Friday’s Nonfarm spike stayed in complete check against the 123’27-123’28 level and this will be key to watch on the week.

Bias: Neutral/Bullish

Resistance – 123’215**, 123’27-123’28**, 124’01*, 124’06-124’07

Support – 123’10-123’135**, 122’29**** 

For more information please contact DAW Trading at brokersedge@dawtradingdiv.com or at 877-329-0006 and visit us at http://dawtradingdiv.com/brokers-edge/

Disclaimer:

Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. DAW Trading (“DAW”) uses various outside sources for research material regarding futures and options on futures trading therefore the views and opinions expressed in this letter may not necessarily reflect the view of DAW or its staff. The information provided is designed to assist in your analysis and evaluation of the futures and options markets. However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to DAW.

  1. Fed Speak

Members of the Federal Reserve spoke late last week for the first time since the December 13th rate hike. We are looking forward to hearing much more from them this week, especially their opinion on growth now that tax-reform is passed. In their dovish hike in December they refrained from factoring in the tax legislation. The verbiage we hear this week will be key for a Dollar that has started the year off on its back foot and has lost more than 2% since the December Fed meeting. San Francisco Fed President Williams said this morning that the Fed should hike three times this year and expects growth to accelerate due to tax-reform. He also predicts the unemployment rate will grind to 3.7% this year without a large jump in inflation. Fed members Bostic, Williams and Rosengren speak tomorrow afternoon. Minnesota Fed President Kashkari, a rate hike dissenter, speaks Tuesday while his companion in dissenting, Chicago Fed President Evans speaks Wednesday. St. Louis Fed President Bullard who spoke last Thursday also speaks on Wednesday. Outgoing NY Fed President Dudley speaks on Thursday.

 

  1. Inflation data

To add fuel to the interpretation of Fed speak are fresh reads on PPI Thursday and the more closely watched CPI on Friday. As we all know, lagging inflation has been the key argument in only gradually tightening policy. In her last statements in December, outgoing Fed Chair Janet Yellen expressed concern on whether recent rate hikes stopped inflation in its tracks. Also on Friday is Retail Sales which has been trending strongly in recent months. As we know, inflation worries are not only domestic and are a major concern around the world. We remain long term bearish the Dollar and believe that we can see it close out the first quarter by losing somewhere in the ball park of 4%. However, between these reads and the Fed speak, an oversold Dollar with a 14-day RSI near 30 has struggled to follow through on the downside this last week. It would be prudent to take something off the table if you have been playing either the Dollar short or the Euro long and look for an opportunity to reposition at a better spot on volatility this week.

  1. China data

Data out of China this week includes CPI and PPI on Tuesday night and reads on Trade Balance Thursday night. These will be critical for several markets that have performed extremely well to start the year. Crude Oil is at the highest level since May 2015. Palladium traded to a new all-time high of 1101.70 and took out the January 2001 level at 1090, it is currently up 92% since the start of 2017. The Aussie has gained about 5% in a month but faces our major three-star resistance overhead at .7870-.7884. All three of these are likely to continue higher in the long-term, however, choppy reads on China data should open the door for a nice swing trade lower this week. Also, be aware that Australia has some of its own data this week; Building Approvals on Monday night, Business Confidence Tuesday and Retail Sales Wednesday.

  1. Earnings season underway

The S&P and NQ both set record high closes on Friday and the momentum is extremely strong. With the NQ taking the lead, we are targeting 6707 this week. Earnings season gets underway and JP Morgan and Wells Fargo report on Friday. The banking sector put in a very strong 4th quarter gaining nearly 10% (XLF) but some have expressed concern over tax-reform legislation slowing earnings in the near-term. Also, we have been putting a lot of emphasis on the small caps lagging. The Russell 2000 still has not taken out its December 4th all-time high. It finished Friday’s session just shy of that 1564.4 mark, it must close out above here this week to confirm this move in equities. 

For more information please contact DAW Trading at brokersedge@dawtradingdiv.com or at 877-329-0006 and visit us at http://dawtradingdiv.com/brokers-edge/

Disclaimer:

Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. DAW Trading (“DAW”) uses various outside sources for research material regarding futures and options on futures trading therefore the views and opinions expressed in this letter may not necessarily reflect the view of DAW or its staff. The information provided is designed to assist in your analysis and evaluation of the futures and options markets. However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to DAW.

BrokersEDGE Grain recap 1-5-18

CORN (March)

March corn futures finished the first week of the year up ¼ of a cent, trading in a range of 4 ½ cents over the four sessions. Fridays Commitment of Traders report showed that funds bought back 8,957 contracts, reducing their net short position to 189,536. This was the second consecutive week that funds reduced; three is a trend. The focus this week will be on Fridays USDA report, we will be compiling estimates and making those available by midweek. On the technical side of things, the market has been in a narrow range for several months. We have been in the camp of playing a nickel on either side o f 350 until we get a new fundamental catalyst to give us a breakout or breakdown. First technical resistance for Mondays trade will come in at 354 ½. Until we see consecutive closes above, bullish expectations should be tempered. If the market can achieve a conviction close above, we could see short covering from funds to 359 ¼-360 ½. This pocket represents a key Fibonacci retracement, the December 4th highs, and the 100-day moving average.

SOYBEANS (March)

March soybeans finished last week’s session up 7 ¼ cents, trading in a range of 18 ¼. Fridays Commitment of Traders report showed funds sold 16,457 futures, extending their net short position to 87,834 futures. This is the most bearish they have been sine June/July (where we bottomed). As with the other grain markets, the focus this week will be on Fridays USDA report which will be released at 11am cst. We will continue to compile estimates and have those for you by midweek. Technically speaking, the market has stabilize well following a dramatic uninterrupted 68 cent meltdown in December. Significant resistance comes in from 985 ½-990. This pocket represents the 50 and 100 day moving average, as well as the 50% retracement from the June lows to July highs. If the market can achieve consecutive closes above this pocket, we expect to see short covering from the funds get us back above the $10 handle.

WHEAT (March)

March wheat futures finished last week’s trade up 7 cents, trading in a range of 9 ½. Fridays Commitment of Traders report showed funds bought back 16,537 futures, reducing their net short to 135,523 contracts. Cold and dry weather have helped support prices, but it will still be a while longer before we see the true effects of that. Seasonally, this is a weak time of the year for wheat futures; we sent out a 15-year seasonal statistic in last week’s report referencing that. We have been referencing the 50-day moving average for months now as key resistance. The market is lingering right around it as we were not able to see a convincing trade above it yet. If we start to see consecutive closes above, we could see short covering towards 447 ¼. We are tempering the expectations and siding with the seasonal trend and looking at the sell side at these levels.

 

For more information please contact DAW Trading at brokersedge@dawtradingdiv.com or at 877-329-0006 and visit us at http://dawtradingdiv.com/brokers-edge/

Disclaimer:

Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. DAW Trading (“DAW”) uses various outside sources for research material regarding futures and options on futures trading therefore the views and opinions expressed in this letter may not necessarily reflect the view of DAW or its staff. The information provided is designed to assist in your analysis and evaluation of the futures and options markets. However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to DAW.

CORN (March)

Yesterdays Close: March corn futures closed down 2 cents, trading in a range of 3 ¼ cents on the day. Funds were estimated sellers of 5,000 contracts on the session.

Fundamentals: Export sales this morning came in at a dismal 101,200 metric tons, this compares with the expected range form 600,000-900,000 metric tons and last week’s 1,245,500 metric tons. Yesterday’s weekly EIA inventory data showed that ethanol production was down from 1.090 million barrels a day to 1.032 million barrels per day. Ethanol has been a silver lining for the corn market, the overall trend has been stronger so this week’s read is more of an outlier, if weakness becomes a new trend then we will have some issues. Market participants are continuing to watch weather and developments in South America, there is nothing new to report on that front this morning. Next week’s USDA report is arguably the most important fundamental catalyst on the horizon as we will get a good deal of updates. We will start compiling estimates and have them in next week’s reports.

Technicals: We saw a lot of folks get excited about corn earlier in the week while we were waving the caution flag suggesting you trade the market you have not the one you want. The market failed at the 50-day moving average which will continue to be first resistance, we have not seen a conviction close above this technical since July; this comes in at 354 ½ today. We continue to believe a nickel on either side of 350 represents opportunity, until we get a fundamental catalyst to give us a breakout or a breakdown. Volatility has been extremely light which gives a tremendous opportunity in the options market.

Bias: Neutral/Bearish

Resistance: 354 ¼-355 ¼***, 360-361 ¾***, 375****

Support: 345-346 ½**, 334-335 ¼***, 323-325 ¼**

 

SOYBEANS (March)

Yesterdays Close: Soybean futures closed 1 ¾ cents lower yesterday, trading in a range of 9 ¾ cents on the day. Funds were estimated sellers of 3,000 contracts on the session.

Fundamentals: Export sales this morning came in at 554,000 metric tons, this compares with the expected range from 600,000-900,000 metric tons; last week’s export sales came in at 974,696 metric tons. Soymeal and soy oil are trading higher this morning which are offering support to futures, we will want to see volume confirm price on the floor open. Weather in South America will continue to be important going forward as they round out planting and get into crop development. There are no new updates this morning on that front. Next week’s USDA report will be a major catalyst for setting the tone to start the year, that is on the 12th and we will start providing estimates towards the middle of next week.

Technicals: Soybeans have been more or less consolidating between 960-970 after a bloodbath in the back half of December. The bulls still have a lot of work to do on the chart to get in good graces. A close above 971 ¾ opens the door to 985 ½-986 ½. This pocket represents the middle of the 100-day moving average and the 50% retracement from the June lows to the July highs. This will be a significant pocket before and after the USDA report. The chart remains bearish, but for those who want to be long into the report we have been recommending shopping for cheap call options over the week as it gives great exposure with limited risk.

Bias: Neutral

Resistance: 985 ¼-986 ½***, 999-1004**

Pivot: 971 ¾

Support: 950-952 ¼***, 937 ½***, 922 ¼****

 

WHEAT (March)

Yesterdays Close: Wheat futures closed 1 ½ cents lower yesterday, trading in a range of 5 on the day. Funds were estimated to have been sellers of 2,000 contracts for the session.

Fundamentals: Export sales this morning came in at 131,000 metric tons, this compares with the expected range from 225,000-500,000 metric tons and last weeks 487,352 metric tons. Colder and drier weather has been offering some support, but the damage may not be known until winter wheat comes out of dormancy. Keep in mind that we are also in a seasonally weak time of year. If you had sold March Chicago wheat on January 3rd and bought back on the 16th, you would have been profitable for 12 of the last 15 years with the average gain being nearly 18 cents. Some of that seasonality is likely due to weather premium coming in ahead of time and then going out.

Technicals: Wheat futures closed above the 50-day moving average for the first time in a long time earlier in the week, but it is not what we consider a “conviction close” as it more or less lingers right alongside it. If the market can achieve a conviction close above, we could see short covering come into the market to 447 ¼. We still like the bear side of the market but have been more than nimble with our first recommendation in weeks coming in this week to sell from 433-437. We have since reduced and would be looking to step back in on a confirmation of a failure here.

Bias: Bearish

Resistance: 435-437 ½ ***, 443-448 ¼ ***, 459-461 ¼**

Support: 429**, 416 ½-420 ¾**, 410 ½**, 399-402 ¾****

 

For more information please contact DAW Trading at brokersedge@dawtradingdiv.com or at 877-329-0006 and visit us at http://dawtradingdiv.com/brokers-edge/

Disclaimer:

Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. DAW Trading (“DAW”) uses various outside sources for research material regarding futures and options on futures trading therefore the views and opinions expressed in this letter may not necessarily reflect the view of DAW or its staff. The information provided is designed to assist in your analysis and evaluation of the futures and options markets. However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to DAW.

E-mini S&P (March)

Yesterday’s close: Settled at 2723.75

Fundamentals: Global equity markets continue their surge as the DAX joins the party gaining more than 1% this morning for two reasons; a blowout German Retail Sales number coupled with a Eurozone CPI read that fell just shy of expectations. Domestic indices capitalize off weaker currencies, i.e. the U.S Dollar and S&P. This was a great domestic read for Germany, however, the Eurozone CPI coupled with the anticipation ahead of U.S Nonfarm Payroll has encouraged a lower Euro. Asian markets continued their push after Japan finally took out the 1992 highs. The S&P and NQ are also higher ahead of today’s Nonfarm Payroll due at 7:30 am CT. Expectations are for job growth at 190k, we expect a number in the ballpark of 220k. However, for us, as always, the Average Hourly Earnings Growth is most important. Expectations come in at +.3% and we expect a number at .2%; ultimately this is great for equities to some earnings growth but ultimately this lagging indicator along with inflation will keep the Fed from moving any faster than markets have priced in. As discussed for the last three weeks, we will continue to watch the Russell 2000 small caps which have still failed to take out their December 4th all-time high. Lastly, let’s not forget that ISM Non-Manufacturing data, a read we watch very closely, is at 9:00 am CT.

Technicals: Our S&P target of 2728.75 was hit yesterday, congrats to those who jumped on board and especially to those who chased our recommendation above 2700. Both the S&P and NQ are in melt-up mode and we remain Bullish. If you exited as we suggested yesterday and have been following us, there is no reason to force the next trade ahead of data today, especially if you caught the move lower last week. Resistance comes in at 2740.50 and then again at 2747.75, look for a test into this. However, the Russell 2000 continues to concern us and must close out above 1564 today to keep the market as a whole wildly bullish, also coinciding with a continued close above 2728.75 in the S&P.

Bias: Bullish

Resistance – 2740.50**, 2747.75**

Pivot – 2728.75***

Support – 2718.25*, 2708.50-2711**, 2698.25-2700***

 

Crude Oil (February)

Yesterday’s close: Settled at 62.01

Fundamentals: Yesterday’s EIA report was actually bearish despite a Crude draw of more than 2 mb than expected at -7.42 mb. This is because Distillate inventories gained 8.9 mb and Gasoline 4.8 mb. This explains the higher than seasonally usual run rate in the read last week; Crude was drawn significantly to create products. Furthermore, production did bounce back from the drop in last week’s report to finish the year at 9.782 mbpd. As we have discussed all week, the situation in Iran has kept a bid under the market and not because of domestic supply disruptions but more so what will happen with the U.S and the nuclear deal/sanctions in a market that is seeing supply currently tighten. Yemen militants took credit for a missile launched at Saudi that was intercepted.

Technicals: Price actin traded to a high of 62.21 yesterday and failed against that May 2015 high and resistance at 62.58 we discussed yesterday. We are now introducing a Bearish Bias to Crude at these levels and traders can look to risk a stop above yesterday’s high. We are not afraid to add on a bounce, however, if it makes new highs traders must not be stubborn. The tape is now hugging where we had support at 61.50 yesterday, this level is now 61.37 today. We have three layers of support above what is now a major three-star level at 58.87-59.96. This is our target to the downside, however, a close below here should get the ball rolling on further selling. We expect to see a record net-long position in today’s CoT, if everyone has bought, who is left to buy. If the selling does not come in today, we will be readily positioned for early next week.

Bias: Bearish/Neutral

Resistance – 62.58**, 63.39**, 66.87***, 68.43**

Support – 61.37**, 61.11**, 60.85**, 59.87-59.96***, 58.97-58.99***

 

Gold (February)

Yesterday’s close: Settled at 1321.6

Fundamentals: Gold has stayed elevated extremely well despite strong data this week and ahead of Nonfarm Payroll. Today’s close will boil down to this Nonfarm read. Regardless, we will remain Bullish in the long run, but this could encourage profit taking and a short-term breather; two to five sessions. Expectations come in at 190k jobs created, however, we believe the number will be more like 220k. For us, the bigger component is Average Hourly Earnings growth which is expected to come in at +.3%. We expect to see a lower number at +.2%. Overall, we think the read can be good but not good enough to encourage the Fed to move at a faster pace than already anticipated. Ultimately, the Dollar might hop up a little for two or three sessions, but a good report does not change our anticipation that the Dollar Index can and should test near 87 before the end of Q1. Also, today is ISM Non-Manufacturing, a read that we like to watch very closely, this is due at 9:00 am CT.

Technicals: This is as constructive tape as one could ask for. Today is also the start of the Silver seasonal buy that lasts into February. We have been eyeing major three-star support at 1302-1303.4 as a strong buy opportunity on a pull back this week but to our surprise we have not gotten it. As discussed, we have been Bullish and remain Bullish.

Bias: Bullish

Resistance – 1323*, 1335.8**, 1358-1365***

Pivot – 1317-1318.5

Support – 1307.1-1309.8*, 1302-1303.4***, 1292.9**, 1279.5***

 

Natural Gas (February)

Yesterday’s close: Settled at 2.88

Fundamentals: Yesterday’s storage read was came in below the range of expectations at -206 bcf and price action sold off hard in a delayed reaction. Though we like to believe this was bulls taking profits, the bear camp has not truly relinquished control of this market. Instead, this was likely the bear camp repositioning ahead of a long weekend on the east coast, one that has already seen a lot of school and factory closings. Remember cold weather is bullish Natural Gas, but extreme storms actually lowers demand due to the closings of high consumption buildings.

Technicals: Price action settled below the support level we were eyeing most closely this week at 2.8926. This has completely Neutralized any bias we have in the market and we are now in a wait and see mode. The bears are in the driver’s seat, but we see no edge to either side. Traders can look to resell the first test back to key resistance at 2.8926-2.9048 and risk a close back above here. However, those who are still bullish can find support at 2.734-2.7664, but a close below here is very bearish.

Bias: Neutral

Resistance – 2.8926-2.9048*, 2.9415**, 3.00-3.01***, 3.108-3.145**, 3.21**, 3.28-3.32***

Support – 2.734-2.7664**, 2.562***, 2.486-2.522****

 

10-year (March)

Yesterday’s close: Settled at 123’215

Fundamentals: Treasury markets remain under pressure due to strong global growth data and breakout record highs in stocks across the globe. The 10-year has not taken out the mid-December low but the 2’s and 5’s have though they also consolidated back off those lows ahead of today’s Nonfarm Payroll data. We believe there to be a buy opportunity around the corner in the 10-year, but it will need some help from the data today to hold this level. Nonfarm Payroll is due at 7:30 am CT, we expect to see strong job growth but ultimately expect lagging earnings growth to keep prices in the longer end of the curve afloat. ISM Non-Manufacturing is due at 9:00 am CT and must not be overlooked.

Technicals: Price action neared the December 21st low of 123’125 with a low of 123’135 against our key support level. However, first support at 123’20-123’225 has kept the market in check on a closing basis, this will be critical to watch after today’s data read. We believe long term support at the lower half of 123 will present that buy opportunity once again very soon. Today is building to be the fourth session in a row with a lower high and a close back above 123’27 is need to neutralize weakness.

Bias: Neutral

Resistance – 123’27**, 124’01*, 124’06-124’07**, 124’125-124’135**, 124’295-125’00***

Support – 123’20-123’225**, 123’10-123’135**, 122’29****

 

For more information please contact DAW Trading at brokersedge@dawtradingdiv.com or at 877-329-0006 and visit us at http://dawtradingdiv.com/brokers-edge/

Disclaimer:

Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. DAW Trading (“DAW”) uses various outside sources for research material regarding futures and options on futures trading therefore the views and opinions expressed in this letter may not necessarily reflect the view of DAW or its staff. The information provided is designed to assist in your analysis and evaluation of the futures and options markets. However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to DAW.

Cattle Commentary: Cattle futures were both sides of unchanged today, starting the morning session with an attempted breakout which led to an ultimate failure by the end of the day. February live cattle futures finished down .85 at 122.10, trading in a range of 1.525 on the session. As mentioned yesterday, funds are starting to roll some and volume is picking up in April, which finished down .725 at 123.65. March feeders finished the day down 1.725 at 145.10, trading in a range of 3.525. spreads are wide with bids at 121 and offers at 126. There was a small reginal that payed 125 in the north today, that is two over the bulk of last week’s trade. As mentioned in yesterday’s report, futures prices are opportunistic for hedgers and speculators. Boxed beef was up again today.

PM Boxed BeefChoiceSelect

Current Cutout Values: – 208.67 – 200.86

Change from prior day: – .05 – 1.70

Choice/Select spread: – 7.81

Cattle Technicals

Live Cattle (February)

February live cattle attempted to break out of our major resistance pocket from 123.35-123.80 for the third session in a row. If you’ve been reading our reports you know that this represents a key Fibonacci retracement from the August lows to November highs, the 50-day moving average, and more importantly a breakout point from October 24th and a breakdown point from December 1st. The inability to breakout led to long liquidation from funds which opens the door to our target of 120.20-120.70. This represents the middle of the range from the August lows to the November highs, as well as the 100-day moving average. If this holds it will set the bulls up in a good spot, marking higher lows with potential higher highs to follow.

Resistance: 123.35-123.80****, 126.65**, 131.95**

Support: 120.20-120.70**, 119.85***, 118.05-118.15**

 

Feeder Cattle (March)

March feeder cattle looked destined to test resistance from 149.10-149.40 but ran out of gas in the afternoon, posting a high of 148.55. The inability to sustain momentum gave funds an excellent opportunity to liquidate some long positions after climbing 9.95 in the last 7 sessions. We think this liquidation could continue to fill the gap from 143.05-143.55. that pocket needs to hold on a closing basis to encourage a firm trade going forward. A failure could lead to a retest of the 200-day moving average which now comes in just shy of 140.

Resistance: 146.45-146.95**, 149.10-149.40***, 153.175-154.05***

Support: 143.05-143.55***, 139.85**, 138.30-138.75****

 

Lean Hog Commentary & Technicals

Lean hog futures traded both sides of unchanged today, with February futures finishing up .45 at 71.50, trading in a range of .975. Prices remain at the top end of the range with first resistance coming in from 72.25-72.45, above that is contract highs at 73.30. We continue to believe that there is limited near term value at these prices and a failure to breakout will lead to long liquidation. A breakdown and close below support from 70.20-70.30 opens the door to accelerated selling, pressing prices back to the bottom end of the range which comes in from 66.70-67.05. This pocket represents the middle of the range from the August lows to the November highs, as well as the 200-day moving average. A hair above that is the 100-day moving average which comes in at 67.40

Resistance: 72.25-72.45***, 73.30****, 74.50-75**

Support: 70.20-70.30**, 68.30-68.475***, 66.70-67.05****

 

For more information please contact DAW Trading at brokersedge@dawtradingdiv.com or at 877-329-0006 and visit us at http://dawtradingdiv.com/brokers-edge/

Disclaimer:

Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. DAW Trading (“DAW”) uses various outside sources for research material regarding futures and options on futures trading therefore the views and opinions expressed in this letter may not necessarily reflect the view of DAW or its staff. The information provided is designed to assist in your analysis and evaluation of the futures and options markets. However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to DAW.

Euro (March)

Session close: Gained about half a penny

Fundamentals: The Dollar continues to freefall despite a much stronger than expected ADP Payroll read and Services PMI. However, Jobless Claims missed for the third week in a row. St. Louis Fed President James Bullard said today that the tax legislation has boosted growth and equity prices but should not encourage the Fed to move faster. Regional PMI data out of Europe was choppy but the Eurozone reads both beat by a tenth, anchored by a strong Germany. This week boils down to Nonfarm Payroll tomorrow at 7:30 am CT but still Eurozone CPI at 4:00 am CT and U.S ISM Non-Manufacturing at 9:00 am CT should not be overlooked. We will be watching the Average Hourly Earnings read most closely and given that job creation will be solid.

Technicals: Price action extended to a high of 1.2155, just shy of our rare major four-star resistance at 1.2180-1.22135. We have been Bullish the Euro for months but last night we got specific with a buy recommendation. If you got aggressive and bought ahead of the 1.20435 level, it would be smart to manage risk and roll the stop up below today’s session low.

Bias: Bullish

Resistance – 1.2180-1.22135****, 1.2434**, 1.2608***

Support – 1.20435***, 1.2006**, 1.1950-1.1966**, 1.1918-1.1926**, 1.1797-1.1799***

 

Yen (March)

Session close: Lost about 17 ticks on the session

Fundamentals: The Yen is the only major currency that has not capitalized off the weaker Dollar. Price action is being suppressed due to rising Treasury yields and strong growth data from around the world. Remember, the Yen is a safe haven currency. However, the Gold phenomena is alive and well. BoJ Kuroda has done a superb job in keeping the Yen bulls at bay. Still, we believe the Yen has tremendous long-term value down here and if the Dollar continues to sell off it will have no choice but to wake up. Of course, tomorrow’s Nonfarm Payroll Report will be key for this trade.

Technicals: A bad day for Yen bulls as the tape extended its two-day losing streak. Price action is testing first key support at .8889-.8902 and a close below here tomorrow which also aligns with a near-term trend line will encourage further selling. Only a move back above today’s session high at .8920 will neutralize the weakness on the week.

Bias: Neutral/Bullish

Resistance – .8920**, .8957**, .8984**, .9060-.9091***, .9164**

Support – .8889-.8902**, .8847**, .8782-.8808***

 

Aussie (March)

Session close: Gained a quarter on the session

Fundamentals: The Aussie continues it surge, 15 positive session out of 17. Data from China has been consistently good this week and this along with higher commodity prices has been a major catalyst for this leg higher. We finally have some significant data out of Australia tonight with a read on Trade Balance at 6:30 pm CT. As we head into tomorrow, the trade will be at the mercy of U.S jobs data and the Dollar.

Technicals: There is no question that the Aussie is overbought, still, it continues its surge higher. We have had major three-star resistance overhead at .7870-.7884 for quite some time and we would expect that this level can slow down the buying and encourage profit taking. The 14-day RSI at 76 is now the highest since 80 on July 20th. The 9-week RSI has a little room to push, though it is essentially signaling overbought as well.

Bias: Neutral

Resistance – .7870-.7884***, .8000**, .8100***

Support – .7770-.7799**, .7712-.7728***, .7671-.7678***, .7623-.7630**, .7498-.7501***

 

Canadian (March)

Session close: Gained about 30 ticks on the session

Fundamentals: The Canadian put in a strong session today after a monster Raw Materials Purchase Index read. With strong energy and metals prices, inflation is starting to poke its head and the commodity currencies, the Aussie and Canadian, are capitalizing in full force. Tomorrow, not only brings key jobs data from the U.S but also Canada at 7:30 am CT. The currency looks to continue a strong run of data on the heels of its bullish breakout last week.

Technicals: Price action pushed higher today and because of lower price action from yesterday’s close and into today it has created a bull flag. Because of this, we are starting to reintroduce a Bullish Bias. However, the Canadian faces off against resistance at the .8022-.8044 level and tomorrows data will ultimately dictate the finish of the week. Pullbacks to .7911-.7932 should be bought.

Bias: Neutral/Bullish

Resistance – .8022-.8044**, .8085

Support – .79675**, .7911-.7932***, .7881**, .7851**, .7730-.7754***

For more information please contact DAW Trading at brokersedge@dawtradingdiv.com or at 877-329-0006 and visit us at http://dawtradingdiv.com/brokers-edge/

Disclaimer:

Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. DAW Trading (“DAW”) uses various outside sources for research material regarding futures and options on futures trading therefore the views and opinions expressed in this letter may not necessarily reflect the view of DAW or its staff. The information provided is designed to assist in your analysis and evaluation of the futures and options markets. However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to DAW.

CORN (March)

Yesterdays Close: March corn futures finished the day down ¼ of a cent, trading in a range of 2 ½ cents on the day. Funds were estimated sellers of 3,500 contracts.

Fundamentals: Corn futures continue to trade in a tight range thanks to the lack of new news coming across the wires. Export sales to start the week were within expectations at 683,898 metric tons. The bulls in the market will want to see better than expected exports on a consistent basis to get the market headed north. Due to the New Years holiday, we will have export sales out tomorrow morning. Ethanol numbers will be out later this morning, we have been seeing strong numbers in production over the last several weeks.

Technicals: Trade the market you have, not the one you want. March corn futures tested the 50-day moving average yesterday but ran out of gas to get out above which led to some light selling pressure in the back half of the day. This has been a key indicator for us as we have been able to see the market close above since July. If the market does achieve a close above resistance, we could see funds cover to 360 ¾. With that said, we are trusting the technical with tight risk measures and using this as an opportunity to sell. We continue to believe that there is an opportunity to trade a nickel on either side of 350 until we get a fundamental catalyst to give us a directional move other than sideways.

Bias: Bearish

Resistance: 354 ¼-355 ¼***, 360-361 ¾***, 375****

Support: 345-346 ½**, 334-335 ¼***, 323-325 ¼**

SOYBEANS (March)

Yesterdays Close: March soybean futures finished yesterdays session up 3 ½ cents, trading in a range of 6 ½ cents on the day. Funds were estimated buyers of 3,000 contracts.

Fundamentals: The market has managed to stabilize from chatter of weather concerns in South America, particularly in Argentina as the next 7-10 days looks dry. Wet weather is expected to move in after that, but the market is waiting for confirmation as we get closer. Many market participants will be waiting for next weeks USDA report on the 12th for nod on direction for the start of the year.

Technicals: The market has stabilized, but don’t think that the chart has instantly turned friendly. The selloff in December has left a lot of technical damage on the chart. Our first pocket of technical resistance remains intact from 967 ¾-971 ¾. If the bulls can chew through and close above, we could see a run back towards 985 ½-986 ½ before next weeks USDA report on the 12th. A failure to close will likely lead to funds extending their net short position. First technical support comes in from 950-952 ¼, a break and close below opens the door to a more significant 937 ½.

Bias: Neutral/Bearish

Resistance: 967 ¾-971 ¾**, 985 ¼-986 ½***, 999-1004**

Support: 950-952 ¼***, 937 ½***, 922 ¼****

WHEAT (March)

Yesterdays Close: March wheat futures closed up ¾ of a cent yesterday, trading in a range of 5 cents for the session. Funds were estimated buyers of 2,500 contracts.

Fundamentals: Concerns over winter kill have helped revive the wheat bulls, but those expectations should be tempered as we will not see the full affect until the crop comes out of dormancy in the spring. Kansas City wheat will be the contract you will want to keep a close eye on for that. Crop progress conditions showed a big drop in the December good/excellent ratings in Kansas (14%), Oklahoma (15%), Nebraska (13%), Colorado (12%).

Technicals: Wheat managed to close above the 50-day moving average, but failed to close above technical resistance at 437. The lack of conviction and follow through yesterday has some sellers stepping back into the market in the early morning session. We are looking for the market to retreat from here, the first line in the sand is 429, but the more significant support pocket comes in from 416 ½-420 ¾. Keep in mind that yesterday was the start of the seasonal; if you had sold March Chicago wheat on January 3rd and bought back on January 15th, you would have been profitable for 12 out of the last 15 years with the average gain being roughly 17 ¾ cents.

Bias: Bearish

Resistance: 435-437 ½ ***, 443-448 ¼ ***, 459-461 ¼**

Support: 429**, 416 ½-420 ¾**, 410 ½**, 399-402 ¾****

E-mini S&P (March)

Yesterday’s close: Settled at 2711

Fundamentals: Congratulations to all of those who followed us on this bullish breakout, it might not have been easy but as we said yesterday morning and at our trade desk Tuesday afternoon, “on a daily chart, the setup is now extremely bullish”. Equity markets were little changed after the release of the FOMC Minutes yesterday and that was a good thing. Persistently low inflation coupled with improving growth has given equity markets an ideal environment to continue their historic run. Fed members are becoming increasingly hesitant to raise rates without inflation reaching their target, however, they see a boost in consumer and business spending due to tax-reform. The state of these two economic indicators allow the Fed to tighten at a very gradual pace. Though there are some fundamentals behind this stock market run, we all must come to terms with how the bulk of it is engineered by ultra-loose monetary policy. Now that the market is comfortable that this policy isn’t going anywhere in a hurry, what’s to stop it? That is not to say, a correction of 3-5% would be bad, it absolutely would be healthy for this market to rebalance. Challenger Job Cuts is due at 6:30 am CT, ADP Payroll at 7:15 am and weekly Jobless Claims at 7:30. Markit Composite and Services PMIs are due at 8:45 am CT and St. Louis Fed President Bullard speaks later today at 12:30. Of course, tomorrow morning brings Nonfarm Payroll.

Technicals: Price action is testing our first or old major upside target as we officially extended it higher on our Midday Market Minute yesterday morning. Though it never hurts to lock in or take profits at 2715.25, we believe today’s price action should near 2728.75. The NQ officially broke out yesterday and this move is poised to extend another 100 points to our new target of 6708.25. Furthermore, the Russell 2000 has finally awoke and can add fuel to this engine. It is trading at the highest level since the December 4th reversal and the daily chart setup is bullish, a close out above its all-time high of 1564.4 will confirm this.

Bias: Bullish

Resistance – 2715.25***, 2728.75***

Support – 2707.25**, 2698.25-2700***, 2691-2692.25**, 2686.50**, 2674.50*, 2667.25-2667.75**, 2651.75-2652.50***

 

Crude Oil (February)

Yesterday’s close: Settled at 61.63

Fundamentals: Crude Oil put in a monster session yesterday gaining nearly 2.5% and extended gains into this morning to the highest level since the week of May 4, 2015. As we discussed yesterday the unrest and clashes in Iran have kept a bid under the market, not for any current disruptions but the potential of seeing a supply disruption domestically and implemented from abroad. To accompany OPEC’s supply rebalancing, we have seen tremendous growth across the globe; Manufacturing and Services data from all regions have essentially beat expectations this week. API data yesterday had Crude drawing slightly smaller than expected at -4.992 mb vs -5.25 mb and we now look to EIA this afternoon at 10:00 am CT. Expectations are for -5.148 mb Crude, +.477 mb Distillates and +2.182 mb Gasoline. This will be the last read from 2017 and we would not be surprised to see the production number flat or lower, adding to the current bull case.

Technicals: Resistance from the May 2015 highs comes n at 62.58 but let’s not kid ourselves, a combination of near and long-term fundamentals has this market in a complete melt-up. We remain Neutral as we cannot find value buying or selling at this level. Stronger support is now building at the 60.74 level and this will be key to watch on pullbacks.

Bias: Neutral

Resistance – 62.58**, 63.39**, 66.87***, 68.43**

Support – 61.50*, 60.74**, 59.96**, 58.97-58.99***

 

Gold (February)

Yesterday’s close: Settled yesterday at 1318.5

Fundamentals: Gold began to see some of that profit taking we were talking about yesterday and traded to an early session low last night of 1307.1. The metal is holding extremely well as Manufacturing and Services data around the globe this week came in much better than expected. The FOMC Minutes brought no surprises and though it didn’t come off more dovish than anticipated, it was the statement in mid-December, just as we expected that has been a key catalyst in this move in Gold. We got much of the same as members becoming increasingly hesitant to raise rates with inflation below their target. Our major thesis behind buying Gold in December is because w believe that will either not hike three times in 2018 or each of the three hikes will be bubble wrapped with a dovish rhetoric. ADP Payroll data is due at 7:15 am CT with weekly Jobless Claims to follow at 7:30. Markit Composite and Services PMI data is due at 8:45 am CT. Of course, tomorrow’s Nonfarm Payroll report is key, and traders should continue to manage their risk.

Technicals: Gold had a healthy pullback of $15 but did not quite get to where we like buying at 1302-1303.4. Remember, we have never wavered from our Bullish Bias, just have simply said there are ways to manage risk without getting out of long positions. A continued close above 1317 will keep the bulls with a clean upper hand.

Bias: Bullish

Resistance – 1317-1318.5**, 1323*, 1335.8**

Support – 1307.1-1309.8*, 1302-1303.4***, 1292.9**, 1279.5***

 

Natural Gas (February)

Yesterday’s close: Settled at 3.008

Fundamentals: Today’s storage read will be key because we are seeing a wide range of projections from -212 to -221. The steeper end of the draw will help keep the bears in the driver’s seat. Next week’s expected record read will also be massive for the same reason, much of more than -300 is already priced in. The storm hitting the east coast this weekend will be crucial for the bulls and bears for the same but different reason; what are the lasting effects. First, simply, does the bitter cold stay long enough to force the draw two weeks to expand well above the expected -200 ballpark estimate. And secondly, what type of lasting outages will we see; schools, power plants etc. When these are out or closed, demand also falls.

Technicals: Price action continues to hug the critical $3 level and will likely continue to do so into today’s storage read. Our bias is not long-term Bullish anymore, but intermediate-term and will likely stay so for the next 30-45 days. Today’s session high of 3.07 is higher than that of yesterday, but lower than that of the week. So, a failed high but one that also has the potential for an outside bearish reversal. We must see support at the 2.923-2.945 level hold through today’s session. If it dips below 2.8926 this week we could see strong liquidation.

Bias: Bullish

Resistance – 3.108-3.145**, 3.21**, 3.28-3.32***

Pivot – 3.00-3.01***

Support – 2.923-2.945**, 2.8926**, 2.83**, 2.734-2.7664**, 2.562***, 2.486-2.522****

 

10-year (March)

Yesterday’s close: Settled at 123’25

Fundamentals: Prices are depressed as global equity markets continue their historic run. The Nikkei put in its best session in more than a year to trade to the highest level since 1992. The S&P and NQ are both extending new all-time highs and we await the same move from the small cap Russell 2000. German 10-year bund yields have also bounced back strong today up 1.5 basis points or about 3%. For the second session in a row the U.S 2 year trekked to a new low and the 5 year is priming to do so on strong data this week. Nonfarm Payroll will be the key read tomorrow. Still, ADP Payrolls are due this morning and Markit Composite and Services PMI data at 8:45 am CT.

Technicals: Price action is turning depressed and our Bias is now Neutral ahead of big data. We must watch first key support at 123’20-123’225 and a move below there today opens the door for S2 and new lows before Nonfarm Payroll tomorrow. We like to believe that there will be a buy opportunity once the sellers sell and this might be tomorrow afternoon. Only a close back above 123’27 will neutralize this weakness before then.

Bias: Neutral

Resistance – 124’01*, 124’06-124’07**, 124’125-124’135**, 124’295-125’00***

Pivot- 123’27

Support – 123’20-123’225**, 123’10-123’135**, 122’29****

 

For more information please contact DAW Trading at brokersedge@dawtradingdiv.com or at 877-329-0006 and visit us at http://dawtradingdiv.com/brokers-edge/

Disclaimer:

Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. DAW Trading (“DAW”) uses various outside sources for research material regarding futures and options on futures trading therefore the views and opinions expressed in this letter may not necessarily reflect the view of DAW or its staff. The information provided is designed to assist in your analysis and evaluation of the futures and options markets. However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to DAW.

Euro (March)

Session close: Settled down about 30 ticks

Fundamentals: Today’s Fed Minutes were very neutral and put emphasis on gradual rate hikes due to lagging inflation. They expressed that inflation might stay below the objective for longer than expected. However, growth and consumer spending forecasts were raised due to the change in tax-policy. Despite a new record low in German Unemployment, the Euro began paring gains this morning ahead of today’s Fed Minutes and saw pressure due to stronger than expected ISM Manufacturing. Tomorrow brings Services data throughout the Eurozone but traders truly await a busy Friday that has Eurozone CPI and U.S Nonfarm Payroll.

Technicals: Yesterday’s price action neared major four-star resistance but clearly ran out of gas as long took profits ahead of a busy week. Like we said yesterday, support at 1.20435 is a solid buying opportunity but please understand the fundamental risks between now and the end of the week. Traders can risk a stop below 1.1950-1.1966, however, could also look to exit simply on a failure to hold 1.20435 on a closing basis. Our goal would be to see a breakout above our rare four-star level at 1.2180-1.22135. Support at 1.1950-1.1966 aligns with the trend line from the September highs. Today’s breather is so far, a healthy consolidation from overbought territory.

Bias: Bullish

Resistance – 1.2180-1.22135****, 1.2434**, 1.2608***

Support – 1.20435***, 1.2006**, 1.1950-1.1966**, 1.1918-1.1926**, 1.1797-1.1799***

 

Yen (March)

Session close: Lost about 16 ticks on the session

Fundamentals: No major news on the Yen front this week. Manufacturing PMI data is due out tonight at 6:30 pm CT along with an overlooked Chinese Caixin Services read at 7:45 pm. A big miss on the Caixin should wake up some bulls in the Yen. The S&P and NQ had monster sessions, however, Treasury prices in both the U.S and Germany edged higher and helped keep Yen sellers at bay.

Technicals: A solid start to the year for the Yen failed to garner any follow through. Today’s price action mutes our near-term Bullish bias due to data risks and our expectation to see the equity markets edge higher into Friday. Minor support comes in at .8915 while we are watching the pocket at .8889-.8902 now to be a more key level. If the Yen can hold this, it should be able to build a constructive base.

Bias: Neutral/Bullish

Resistance – .8957**, .8984**, .9060-.9091***, .9164**

Pivot – 8930-.8937

Support – .8915*, .8889-.8902**, .8847**, .8782-.8808***

 

Aussie (March)

Session close: Gained a few ticks

Fundamentals: The Aussie squeaked out its 14th green session in 16. Prices have continued higher on Dollar weakness and commodity strength in a quiet week for the news out of Australia. Buyers continue to bet on a more hawkish RBA at their meeting more than a month away and one that could hike in Q1. AIG Services data is due at 4:30 pm CT today and Chinese Caixin Services is tonight at 7:45 pm. Traders await tomorrow night Aussie Trade Balance data.

Technicals: The Aussie has made a higher high for six straight sessions before today “merely” matching yesterday’s high. With the 14-day RSI trading above 70 for four straight sessions, we have completely neutralized our bias. First support aligns with the 100-day moving average, but we believe a pull back to .7712-.7728 would be a tremendous buy opportunity if we can get. Remember a month ago we called for that low at .75 to last at least through the end of Q1.

Bias: Neutral

Resistance – .7870-.7884***, .8000**, .8100***

Support – .7770-.7799**, .7712-.7728***, .7671-.7678***, .7623-.7630**, .7498-.7501***

 

Canadian (March)

Session close: Lost nearly a quarter on the session

Fundamentals: Price action pared some gains after finishing green in seven out of eight sessions. Tomorrow we look to the Raw Materials Purchasing Index and Crude Oil inventories. The Canadian failed to follow Crude higher as it gained nearly 2.5% on the session. Tomorrow will be an interesting day for the trade as we eye jobs data from both Canada and the U.S on Friday.

Technicals: The tape was subdued through today and ultimately due for a consolidation lower as it neared overbought territory and as traders took profit from this breakout run. We have now completely neutralized our bias and will await further fundamental news. Price action finished just above first support today, however, weakness should take this lower into major three-star support at .7911-.7932 which would ultimately present a buy opportunity.

Bias: Neutral

Resistance – .8022-.8044**, .8085

Support – .79675**, .7911-.7932***, .7881**, .7851**, .7730-.7754***

 

For more information please contact DAW Trading at brokersedge@dawtradingdiv.com or at 877-329-0006 and visit us at http://dawtradingdiv.com/brokers-edge/

Disclaimer:

Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. DAW Trading (“DAW”) uses various outside sources for research material regarding futures and options on futures trading therefore the views and opinions expressed in this letter may not necessarily reflect the view of DAW or its staff. The information provided is designed to assist in your analysis and evaluation of the futures and options markets. However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to DAW.