Last Trades:
LEQ8: 1.625 at 109.675, trading in a range of 1.925
LEV8: .90 at 111.225, trading in a range of 1.675
GFQ8: .225 at 152.975, trading in a range of 1.275
GFU8: UNCH at 153.525, trading in a range of 1.30
Cattle Commentary: Cattle futures tried to roll over mid-morning, but the bears could not break through our technical support pocket which we have defined as 107.55-107.775 in previous reports (see full technical breakdown below). New news was hard to come by today, early bids at 110 continue to be ignored with offers resting at 115 as we head into the back half of the week. This would lead us to believe steady cash is in the cards. The only action in today’s Fed Cattle Exchange was at 111, which was eventually passed on; there were 0/1,249 head sold. We continue to welcome a pull back, for clients who want to play the short side, we are using the December and October contract.
PM Boxed Beef / Choice / Select
Current Cutout Values: / 204.65 / 197.95
Change from prior day: / (.17) / (.08)
Choice/Select spread: / 6.70
Live Cattle (August)
August live cattle tested and held our support pocket from 107.55-107.775 for the second consecutive session. The inability for the market to breakdown led to short covering which gave the all clear for new buyers to step in. The market now looks poised for a test of 110.175-110.50. This pocket represents a key retracement on the year but more importantly the original breakdown point in March that led into April where we saw a flush down to 97.625.
Resistance: 110.175-110.50****, 112.25-112.925***
Pivot: 109.00
Support: 107.55-107.775**, 106.25-106.35**, 105.10-105.375***
Feeder Cattle (August)
August feeder cattle marked lower highs and lower highs for the fourth consecutive session but finished the day near unchanged, a level we defined in yesterday’s report as “no mans land”. Significant resistance comes in from 150.50-155.975, this pocket represents the February highs. On the support side, we see 150.875-151.15 being a significant pocket. This pocket represents previously important price points, but more significantly, trendline support from the May 17th lows, something we tested and held twice in June and another time on July 11th. A break and close below here could take us down towards 147.50-148.35.
Resistance: 154.45-154.925**, 155.50-155.975****, 159.20-160.00****
Support: 150.875-151.15***, 147.50-148.35***, 145.50-146.20***
Lean Hog Commentary and Technicals (August)
August lean hogs finished positive!!!! For the first time in two weeks, August lean hogs finished green, finishing the day up .675 at 66.225, trading in a range of 1.175. The positive close is a sigh of relief for the bulls but is a pathetic print after an enormous wave of selling. We have been very happy watching this from the sidelines, we may start fishing to the buy side. If you want to be long this market, consider using call options, a tool that gives you great exposure with limited risk.
Resistance: 70.475**, 72.45****
Support: 64.00-64.50**
Euro (September)
Last: 1.7770, up 47 ticks on the session
Fundamentals: The Euro strengthened all the way up to the NYSE closing bell on news that President Trump and European Commission President Juncker reached a deal on trade. Details are limited at the moment but will be revealed with a press conference at the White House this afternoon. The Euro did see a bid this morning on what was better than expected German Business Climate despite it being the worst since November 2012. The U.S Dollar strengthened at the NYSE opening bell but a miss on New Home Sales added to a string of disappointing housing data and reinvigorated buying in the Euro. All in all, the Euro remains rangebound ahead of tomorrow’s ECB Policy Meeting. First, German Consumer Climate is due at 1:00 am CT. The ECB is not expected to rock the boat after their June meeting where they signaled the end of QE at the end of this year. However, this was taken dovishly as they said they would not hike rates until after the summer of next year. Immediately, traders speculated this meant no hike until after ECB President Draghi left his position, meaning December. Over the following weeks, this time frame was firmed up a bit, putting September on the table. This conversation will likely gain traction tomorrow and will play a critical role in the price action of the Euro. U.S Durable Goods, Goods Trade Balance and weekly Jobless Claims are due at 7:30 am CT along with ECB President Draghi’s press conference.
Technicals: The late session spike ran right into first key resistance at 1.1781-1.17945 and this sets the Euro in a strong position ahead of tomorrow’s ECB Meeting. Tomorrow’s close will be pivotal and we expect strong volatility, traders must stay nimble. Still, the technicals work and we have only seen brief dips below 1.1728-1.1732. The bulls will remain in the driver’s seat while price action is above here. However, the bears can easily gain an edge below this level given that would mean another failure at first key resistance.
Bias: Bullish/Neutral
Resistance: 1.1781-1.17945**, 1.1858**, 1.19395-1.1943**, 1.2044**, 1.2176-1.21925***
Support: 1.1728-1.1732**, 1.16745-1.1690**, 1.16095-1.1622***, 1.1474-1.1538****
Yen (September)
Last: .9045 up 21 ticks on the session
Fundamentals: The Yen has held ground very well given the strong move in equites. Yes, some of the early gains dissipated as the session unfolded but the Dollar remained on the weaker side and the Yen has continued to stay bid ahead of next week Bank of Japan moving. Ultimately, this is a move in the Yen that we have believed would happen but could not time; the BoJ firms up a time frame to begin winding down their ultra-loose monetary policy. However, there is a lot of speculation on little substance and as bullish as we would like to be on the Yen, our belief is that this is more likely short covering than fresh buying. The U.S Dollar will remain critical through tomorrow. Out of Japan tonight is Foreign Bond and Investment data at 6:50 pm CT.
Technicals: Price action Sunday night fell shy of first key resistance and remained contained through this afternoon. Even the spike to .90695 today essentially failed to hold this first key resistance level at .9040-.90685. A close above here would technically signal a continuation of this developing patter that could extend to .9147 at minimum. However, a failure at first key resistance would likely find a quiet consolidation at the .8970-.89975 major three-star support level into next week’s BoJ Meeting.
Bias: Neutral
Resistance: .9040-.90685**, .9147**, .9194-9198***, .9320-.9361***
Support: .8970-.89975***, .8816-.8865***
Aussie (September)
Last: .7457, up 40 ticks on the session
Fundamentals: A miss on CPI data last night smacked the Aussie back from major three-star resistance once again. However, price action remained constructive through today’s session. The risk-on trade has continued through Asia after China announced a plan to add infrastructure spending Monday. Today’s U.S hours saw Dollar weakness and a reinvigoration of Monday’s risk-on trade that paused breifly. News ahead of the bell that President Trump and the EU reached a deal added support to the Aussie late. The current backdrop is ripe for additional gains.
Technicals: Price action is attempting a breakout above major three-star support and this negates the recent downtrend and secures a bottom. While there is still headwind at .7484, the daily chart is priming to extend gains and a move to the .7700 area is the cards. A failure to close above .7444-.7454 tomorrow will begin to Neutralize our Bullishness.
Bias: Bullish
Resistance: .7444-.7454***, .7484**, 7541**, .7682-.7705***
Support: .7315-.7329***
Canadian (September)
Last: .76765, up 70 ticks on the session
Fundamentals: There are a lot of things working for the Canadian right now. Trade optimism from NAFTA, from the U.S and EU relations and a strong session for Crude topped off by a weaker U.S Dollar. There is no data out of Canada tomorrow and this is likely a good thing. The path of least resistance is fundamentally higher as risk-on rushes markets across the globe.
Technicals: Today’s price action is certainly bullish. While it does face major three-star resistance, it did breakout above a trend line from the April highs. We want to see a convincing close tomorrow about our major three-star resistance in order to encourage higher price action and increase our Bullish Bias to outright.
Bias: Bullish/Neutral
Resistance: .7650-.7679***, .7774-.7782**
Support: .7584-.7592**, .7531**, .74825**, .7375***
Euro (September)
Last: 1.7770, up 47 ticks on the session
Fundamentals: The Euro strengthened all the way up to the NYSE closing bell on news that President Trump and European Commission President Juncker reached a deal on trade. Details are limited at the moment but will be revealed with a press conference at the White House this afternoon. The Euro did see a bid this morning on what was better than expected German Business Climate despite it being the worst since November 2012. The U.S Dollar strengthened at the NYSE opening bell but a miss on New Home Sales added to a string of disappointing housing data and reinvigorated buying in the Euro. All in all, the Euro remains rangebound ahead of tomorrow’s ECB Policy Meeting. First, German Consumer Climate is due at 1:00 am CT. The ECB is not expected to rock the boat after their June meeting where they signaled the end of QE at the end of this year. However, this was taken dovishly as they said they would not hike rates until after the summer of next year. Immediately, traders speculated this meant no hike until after ECB President Draghi left his position, meaning December. Over the following weeks, this time frame was firmed up a bit, putting September on the table. This conversation will likely gain traction tomorrow and will play a critical role in the price action of the Euro. U.S Durable Goods, Goods Trade Balance and weekly Jobless Claims are due at 7:30 am CT along with ECB President Draghi’s press conference.
Technicals: The late session spike ran right into first key resistance at 1.1781-1.17945 and this sets the Euro in a strong position ahead of tomorrow’s ECB Meeting. Tomorrow’s close will be pivotal and we expect strong volatility, traders must stay nimble. Still, the technicals work and we have only seen brief dips below 1.1728-1.1732. The bulls will remain in the driver’s seat while price action is above here. However, the bears can easily gain an edge below this level given that would mean another failure at first key resistance.
Bias: Bullish/Neutral
Resistance: 1.1781-1.17945**, 1.1858**, 1.19395-1.1943**, 1.2044**, 1.2176-1.21925***
Support: 1.1728-1.1732**, 1.16745-1.1690**, 1.16095-1.1622***, 1.1474-1.1538****
Yen (September)
Last: .9045 up 21 ticks on the session
Fundamentals: The Yen has held ground very well given the strong move in equites. Yes, some of the early gains dissipated as the session unfolded but the Dollar remained on the weaker side and the Yen has continued to stay bid ahead of next week Bank of Japan moving. Ultimately, this is a move in the Yen that we have believed would happen but could not time; the BoJ firms up a time frame to begin winding down their ultra-loose monetary policy. However, there is a lot of speculation on little substance and as bullish as we would like to be on the Yen, our belief is that this is more likely short covering than fresh buying. The U.S Dollar will remain critical through tomorrow. Out of Japan tonight is Foreign Bond and Investment data at 6:50 pm CT.
Technicals: Price action Sunday night fell shy of first key resistance and remained contained through this afternoon. Even the spike to .90695 today essentially failed to hold this first key resistance level at .9040-.90685. A close above here would technically signal a continuation of this developing patter that could extend to .9147 at minimum. However, a failure at first key resistance would likely find a quiet consolidation at the .8970-.89975 major three-star support level into next week’s BoJ Meeting.
Bias: Neutral
Resistance: .9040-.90685**, .9147**, .9194-9198***, .9320-.9361***
Support: .8970-.89975***, .8816-.8865***
Aussie (September)
Last: .7457, up 40 ticks on the session
Fundamentals: A miss on CPI data last night smacked the Aussie back from major three-star resistance once again. However, price action remained constructive through today’s session. The risk-on trade has continued through Asia after China announced a plan to add infrastructure spending Monday. Today’s U.S hours saw Dollar weakness and a reinvigoration of Monday’s risk-on trade that paused breifly. News ahead of the bell that President Trump and the EU reached a deal added support to the Aussie late. The current backdrop is ripe for additional gains.
Technicals: Price action is attempting a breakout above major three-star support and this negates the recent downtrend and secures a bottom. While there is still headwind at .7484, the daily chart is priming to extend gains and a move to the .7700 area is the cards. A failure to close above .7444-.7454 tomorrow will begin to Neutralize our Bullishness.
Bias: Bullish
Resistance: .7444-.7454***, .7484**, 7541**, .7682-.7705***
Support: .7315-.7329***
Canadian (September)
Last: .76765, up 70 ticks on the session
Fundamentals: There are a lot of things working for the Canadian right now. Trade optimism from NAFTA, from the U.S and EU relations and a strong session for Crude topped off by a weaker U.S Dollar. There is no data out of Canada tomorrow and this is likely a good thing. The path of least resistance is fundamentally higher as risk-on rushes markets across the globe.
Technicals: Today’s price action is certainly bullish. While it does face major three-star resistance, it did breakout above a trend line from the April highs. We want to see a convincing close tomorrow about our major three-star resistance in order to encourage higher price action and increase our Bullish Bias to outright.
Bias: Bullish/Neutral
Resistance: .7650-.7679***, .7774-.7782**
Support: .7584-.7592**, .7531**, .74825**, .7375***
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