Euro (December)
Session close: Gained about 75 ticks on the session
Fundamentals: The Euro extended an already strong session after the FOMC Minutes this afternoon. The Minutes showed that Fed officials are concerned about persistently low inflation and are worried that they may have undercut it with rate hikes. While most officials are set to hike rates in December, we must walk away from these Minutes with an emphasis on ‘gradual’ moving forward. Fed Chair Yellen laid the groundwork for these Minutes in her speech last night with caution on raising rates too quickly as it would potentially halt inflation. This kicked off a strong session for the Euro that saw additional support for weak U.S Durable Goods. Though tomorrow is the Thanksgiving holiday in the U.S it brings the heat with data around the rest of the world; German GDP is at 1:00 am CT, regional PMIs from France and Germany are due at 2:00 and 2:30 am while the Eurozone read is at 3:00. U.K GDP is also due at 3:30. The ECB publishes their Monetary Policy Meeting at 6:30 am CT. The ECB’s Praet speaks at 2:35 am CT and Coeure at 12:15.
Technicals: This is an extremely strong technical session coming on the heels of a hold against major three-star support. Price action is now above the 1.1804-1.1806 level that we discussed yesterday which is now support at 1.1803-1.1810. Resistance comes in at 1.1866-1.18815 and the bulls are in the driver’s seat as a leg this strong should signal a move to the major three-star level at 1.1921-1.1934.
Bias: Bullish
Resistance – 1.1804-1.1806**, 1.1866-1.18815**, 1.1921-1.1934***, 1.1991*, 1.2019**
Support – 1.1705-1.1730***, 1.1694**, 1.1650**, 1.15785*, 1.1481-1.15***
Yen (December)
Session close: Gains about a penny on a strong session.
Fundamentals: The Dollar is down against all major currencies today and the Yen has gained as much as a penny. Above, we discussed the dovish outlook from the Fed Minutes and the groundwork that Janet Yellen laid last night, but one might counter with the fact that the BoJ is more dovish. It does not matter if the BoJ is more dovish and this is because of the pendulum of perception that we love to talk about. Dollar bulls and Yen bears have already positioned themselves on certain expectations and if those expectations are not met then the trade begins to get outwound. Maybe that is because three hikes by the Fed are now not expected next year or maybe because there is a glimmer that the BoJ sees diminishing returns from their QE and will need to taper back at some point in 2018. We are more bullish the Yen today than we were yesterday.
Technicals: Price action traded and settled above major three-star resistance at .8971-.8990, however, we will continue to watch this level into the end of the week. This has the makings of a breakout as the largest short position in the Yen since 2007 will begin to tap out. Today’s session low never traded below the 50-day moving average at .8890 and used this as a spring board. We also have major three-star resistance just above at .9045 and a close above here could ignite the next bull leg to .9321-.9359. The 200-day moving average comes in at .9018 so you can see that there is a lot of resistance within this range, hence the power and short-covering that we could see on a close out above here.
Bias: Bullish
Resistance – .8971-.8991***, .9018**, .9045***, .9119**, .9321-.9359****
Support – .8890-8928**, .8800-.8828***, .8755-.8764**, .8639**, .8427***
Aussie (December)
Session close: Gained about 30 ticks on the session
Fundamentals: Today’s follow through on the Aussie was supported by a weaker Dollar. The session was light on Aussie centric news. However, a strong session saw further support from rising commodity prices.
Technicals: Support held overnight, and price action got out above first resistance today and we are now creating major three-star resistance at .7645-.7678; this is the trend line from the September highs combined with the 200-day moving average and will be a tough level to crack. However, a move out above here would encourage further buying.
Bias: Bullish/Neutral
Resistance – .7645-.7678***, .7726-.7755**, .7824**, .7891-.7893***
Pivot – .7605-.7607
Support – .7530-.7550**, .7390****
Canadian (December)
Session close: Gained about 40 ticks on the session
Fundamentals: As with the other currencies, the Canadian capitalized off a weaker Dollar. Crude Oil put in a strong session with the front month contract trading to the highest level since July 1st, 2015 and closing there. We are also bullish Crude and expect higher price action into next week’s OPEC meeting. Data has been light out of Canada all week but tomorrow brings Retail Sales at 7:30 am CT.
Technicals: Today clearly broke the Canadian out above trend line resistance from the September highs and against price action over the last two weeks. The market now has a bullseye on major three-star resistance at .7950-.7960 which encompasses the 50 and 100 day moving average.
Bias: Bullish
Resistance – .7851-.7856**, .7897**, .7950-.7960***, .8019-.8035**, .8293****
Support – .7790-.7803***, .7730-.7745**, .7671**, 7550***
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