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We will finish the week out with December futures, but Open Interest has switched, and December expires on the close Monday.
Session close: Lost 30.5 ticks and settled at 1.17935
Fundamentals: The Euro finished the session lower after the ECB kept inflation expectations below 2% through 2020. They did raise growth expectations through the same time frame, however, inflation is viewed as the key catalyst for a rate hike. This morning we saw robust Manufacturing and Composite data out of all regions in Europe and the growth story is there. Our bullish thesis relies on a weaker Dollar which we began to see yesterday and stronger growth that will force the ECB’s hand into a hawkish bias in the first quarter of next year. Strong U.S Retail Sales today helped stop the Euro before ECB President Mario Draghi ultimately turned the tape. The data front takes a breather tomorrow, but we still have Industrial Production out of the U.S at 8:15 am CT. Developments in tax-reform will be key and push the Dollar in the near term.
Technicals: Price action failed just shy of 1.18785 before reversing sharply. The 1.17215-1.1730 major three-star level is what traders need to watch and as long as this hold we believe the Euro will setup with a strong buy opportunity.
Resistance –1.18645 1.1878**, 1.1925**, 1.19975-1.2019***, 1.2154-1.2180****
Pivot – 1.1818-1.1820
Support – 1.17215-1.1730***, 1.1672**, 1.15785*, 1.1481-1.15***
Session close: Gained 24.5 ticks and settled at .89145
Fundamentals: Considering strong Retail Sales and Euro weakness, today was a fairly disappointing session for the Dollar and we believe this is very favorable for the Yen. Yes, the Yen did not see much of a follow through on today’s session but again considering the U.S data, it held very well. The question mark right now is the equity market on the close and if doubts continue to swirl around tax-reform we believe the Yen is in the perfect position to capitalize best. Tonight, we have key Manufacturing data out of Japan at 5:50 pm CT.
Technicals: Price action ran to a high of .89245 and failed against resistance at the .8934-.8941. It has settled back in and remaining above the .8886-.8890 level, we will watch this level into the weekly close in order for the bulls to maintain a slight edge.
Resistance – .8934-.8941**, .9018-.9045***
Pivot – .8886-.8890
Support -.8845-.8863**, .8790-.8801**, .8730***
Session close: Gained 39 ticks and settled at .7675
Fundamentals: The Aussie continued its run on the heels of a tremendous Employment Change report that showed 61,600 jobs gained versus expectations of 19,200. The participation rate jumped four tenths and the unemployment rate stayed the same.
Technicals: Price action is at the highest level in more than a month and right up against what we have had as major three-star resistance at .7645-.7674 which includes the 200-day moving average. However, due to the very strong momentum, fundamentals and the 14-day RSI not being overbought we are moving major three-star resistance to .7726-.7740. A weekly close above the 200-day moving average will remain bullish and target our new major three-star level. Support now comes in at .7640-.7645.
Resistance – .7674**, .7726-.7740***, .7824**, .7891-.7893***
Support – .7640-.7645**, .7581**, .7545**, .7500***, .7390****
Session close: Settled at .7845, up 32.5 ticks
Fundamentals: Today was a strong session for the recently subdued Canadian up into the close. Price action reached a high of .7866 before Bank of Canada Governor Poloz spoke dovishly, saying that they are prepared to keep policy “quite simulative” and allow upside inflation risks to build. He added that they will take a more cautious approach moving forward after two hikes in the middle of this year. This has halted the near-term potential strength and again puts pressure on the U.S Dollar trade to dictate price action in to the weekend. Housing data missed this morning in an otherwise quiet week of data for Canada
Technicals: Today’s settlement was right at R2 while price action traded as high as R3. However, the electronic close was below .7824 and this neutralizes the recent strength. The weekly close will be pivotal and we must watch for further weakness through tomorrow after today’s comments from Poloz.
Resistance – .7824**, .7843*, .7862**, 79225-.7960***, .8019-.8035**, .8293****
Support – .7773*, .7730-.7745***, .7671**, 7550***
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