BrokersEDGE Futures Trading news letter 12-11-17 FX recap

Euro (December)

Session close: Gained 18.5 ticks on the session to 1.17905

Fundamentals: The Euro has been grinding higher since wage growth on Friday’s Nonfarm Payroll report fell short of expectations. It was a quiet morning from Europe but the U.S JOLTs read came in light and further supported the trade. The Federal Reserve is expected to raise interest rates on Wednesday and the ECB meets Thursday morning. Though the ECB is not expected to rock the boat, we remain long-term bullish the Euro and our belief is that the ECB will provide a more hawkish rhetoric than the market expects moving forward. German and Eurozone Sentiment data is due at 4:00 am CT tomorrow. U.S PPI follows at 7:30 am CT and this is a key read on inflation that is followed by the more important CPI Wednesday morning; just in time for the Fed to consider these data points in their decision and statement. Mario Draghi speaks tomorrow at 1:00 pm CT.

Technicals: Thursday evening we called for a test into major three-star support at 1.1728-1.1730 as a strong buy opportunity. Did you capitalize off Friday’s session low of 1.1734? Let’s add that first resistance is 1.1820 and today’s high was 1.1816.

Bias: Bullish/Neutral

Resistance – 1.1820**, 1.18875-1.1903**, 1.1942**, 1.19975-1.2019***, 1.2154-1.2180****

Support – 1.1728-1.1730***, 1.1672**, 1.15785*, 1.1481-1.15***


Yen (December)

Session close: Settled at .8812 down 5 ticks.

Fundamentals: The Yen is fighting off selling pressure from equity markets trading to new all-time highs and BoJ Governor Kuroda eluding to the easy money policy lasting until inflation reaches the banks targets. Since no one out there believes inflation will show up in Japan, guess what, the sellers have come back to the party. Still, we remain long term bullish the Yen but the emphasis in the near-term is because of our bearish Dollar view. A read on Tertiary Industry Activity is due tonight at 10:30 pm CT.

Technicals: Price action is attempting to bottom out against the .8801 support level. We need to see a close back above .88445-.8853 to begin neutralizing this weakness. Ultimately, a close above .8886 is needed to truly neutralize this sell off. Major three-star support is at .8730 and this is the line in the sand.

Bias: Bullish/Neutral

Resistance – .8845-.8853**, .8886**, .8934-.8941**, .9018-.9045***

Support – .8790-.8801**, .8730***



Aussie (December)

Session close: Gained 26 ticks on the session to finish at .7531

Fundamentals: The Aussie is recovering from oversold territory and has held Thursday night’s early low. This was the lowest level since June and it held after strong Chinese Trade Balance data and a weaker U.S Dollar on poor wage growth. The Aussie remains vulnerable due to its own economics on ugly data last week. However, we do believe that U.S Dollar weakness and the potential for Aussie data to turn a corner as expectations are now too low will allow it to find long term value near the .74 mark. Housing Price Index and NAB Business Confidence is due out tonight at 6:30 pm CT. Employment data is Wednesday evening.

Technicals: We are watching for price action to fish for a bottom near our rare four-star support level at .7390. The 14-day RSI is bouncing off oversold at 30.

Bias: Neutral/Bearish

Resistance – .7595-.7605**, .7645-.7676***, .7726-.7755**, .7824**, .7891-.7893***

Pivot – .7530-.7559***

Support – .7390****


Canadian (December)

Session close: Gained 9 ticks on the session to finish at .7782

Fundamentals: Today was a quiet session for the Canadian Dollar which finished last week under immense pressure following the Bank of Canada policy statement. However, let’s not forget that data from Canada has been fairly robust over the last two weeks. This coupled with our long term bearish U.S Dollar thesis leads us to believe that the risk to the downside in the Canadian is limited. The economic data schedule for Canada is light into Thursday and price action will be dictated by the U.S Dollar. We would also like to add that we are beginning feel that pessimism on the NAFTA talks has been over exaggerated.

Technicals: The Canadian is building for its second higher swing low since its pull back and bottoming into the beginning of November. If this holds true it could really begin to propel the market higher. Major three-star support is still the line in the sand at .7739-.7745 and this brings in the 200-day moving average. We must see a close back above .7824 in order to neutralize recent weakness.

Bias: Neutral/Bullish

Resistance – .7824**, .7843*, .7862**, 79225-.7960***, .8019-.8035**, .8293****

Support – .7730-.7745***, .7671**, 7550***


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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.

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