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***
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