Euro (March)
Session close for Thursday, Feb. 8: Settled at 1.2291, down 14.5 ticks
Fundamentals: Thursday's European Central Bank Economic Bulletin was very upbeat calling for a continued expansion of growth “beyond the near term.” Though they did see downside risks due to foreign exchange markets, as expected. ECB economist Praet, a dove, spoke this morning and said inflation may not rise enough to warrant a removal of stimulus measures. Helping lift the Euro off session lows and our major three-star support level was the price action in the British Pound. Though the Bank of England did not hike rates as expected, they telegraphed a hike in the near future. The pound gained nearly two cents before paring much of its gains. U.S. weekly Jobless Claims came in much better than expected but was a casualty to outside market forces. There is no major data tomorrow, we expect the trade to be very technical.
Technicals: Price action reached a session low of 1.2240. Please sign up for a Free Trial at Blue Line Futures to view our entire technical outlook and proprietary bias and levels.
Yen (March)
Session close: Settled at .92045, down 43.5 ticks
Fundamentals: The yen started the session weak on disappointing data reads but picked up as we got into U.S hours. Equity markets saw continued pressure that picked up at the end of the session. With a close on session lows and a new intraday low in the S&P 500, the door is open for further equity weakness in Asia and through Friday. This should continue to support the yen.
Technicals: The technical setup has now become slightly favorable to the bull camp. Please sign up for a Free Trial at Blue Line Futures to view our entire technical outlook and proprietary bias and levels.
Aussie (March)
Session close: Settled at .7796, down 28 ticks
Fundamentals: The Aussie did not show much life on extremely strong import data from China last night. Imports jumped 36.9% YoY compared to 9.8% expected. Considering this and the somewhat subdued day in the dollar, this is very bearish the Aussie; if something cannot rally on good news, then that is bearish. As we have been saying for the last 30 days or so, the Aussie has gotten out ahead of itself. Now it is coming back in. Tonight, there is Home Loan and Housing Finance data at 6:30 p.m. Central. Additionally, traders want to be somewhat cautious selling after such a sharp drop with the RBA Minutes due out at the same time. Also, tonight is CPI and PPI data from China at 7:30 p.m. Central.
Technicals: Price action is heavy and the door open is lower. Please sign up for a Free Trial at Blue Line Futures to view our entire technical outlook and proprietary bias and levels.
Canadian (March)
Session close: Settled at .79465, down 11 ticks
Fundamentals: The Canadian is seeing weakness on the heels of another data miss with New Housing Price Index data this morning. Bank of Canada Governor Wilkins said today that growth is the most robust in a decade, though household debt is the biggest vulnerability. Traders are already keying in on tomorrow’s Employment Report due at 7:30 a.m. Central. This will dictate the close of the week. We remain long-term bullish, but traders want to be cautious or protect positions ahead of this.
Technicals: The next 24 hours will be less technical and more dependent of the Employment Report. Please sign up for a Free Trial at Blue Line Futures to view our entire technical outlook and proprietary bias and levels.
About the Author
Bill Baruch is President and founder of Blue Line Futures, a leading futures and commodities brokerage firm. Bill has more than a decade of trading experience and focuses on developing trading strategies for both long and short-term trading approaches. Prior to Blue Line, Bill was the Chief Market Strategist at iiTRADER. Bill is a featured expert on CNBC, Bloomberg and the Wall Street Journal as well as other top tier publications. Blue Line Futures offers five research reports each day with the Blue Line Express