FX Rundown - Blue Line Express
FX Rundown

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Euro (March)

Fundamentals:The Euro has softened over the last two sessions but more in a consolidatory manner. This morning ECB hawk Lautenschlaeger said that slower growth and soft inflation was expected and is not enough to dent the anticipation of a rate hike later this year. She added that she will wait for projections in March before changing her view. We cannot blame her; the data has been soft but three is needed for a trend. On the U.S front, a slimmer economic calendar this week due to the government shutdown postponed Retail Sales and housing data yesterday. Today, Philly Fed Manufacturing unexpectedly bounced back strongly and broke the softer trend from ISMs and NY Empire State Manufacturing. Tomorrow, NY Fed President Williams speaks at 8:05 am CT and a crucial read on Michigan Consumer data comes at 9:00 am CT.

Technicals:The Euro is not testing the trend line from the November 12th low in the front-month only chart but instead a secondary trend line from the December 11th low that can be drawn with the expiring December contract on that date. Confirming the validity of this trend line is a similar one in the Dollar Index March-only chart with resistance coming at todays high. For the Euro it comes in at 1.1420 and aligns with first key support from our report Tuesday at 1.1438. Buyers at this level can find comfort knowing that major three-star support is just below, it aligns with the trend line from that front-month November 12th low as well as the March low on the same date. We remain Bullish in Bias as we see intermediate and long-term value at this level. A move out above major three-star resistance should fund a further tailwind.

Bias:Bullish/Neutral

Resistance: 1.1504***, 1.1550-1.1553**, 1.1596-1.16325**, 1.1754***

Support: 1.1420-1.1438**, 1.1353-1.1390***, 1.1245***

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Yen (March)

Fundamentals:The Yen has trended lower for three days now as equity markets turn their tires higher. Strong earnings from banks this week, a Brexit deadline assumed to be kicked down the road and news today that the White House is giving-in on the China tariffs have all weighed significantly on the Yen this week. Tonight, Japan National CPI is due at 5:30 pm CT and Industrial Production is due at 10:30 pm CT.

Technicals:The Yen closed below major three-star support at .9210-.9224, therefore, we must begin neutralizing our Bullish Bias. This was the gap from the January 2nd close and the breakout in the following session. Support still comes in below at .9140-.9162 and a check off this level and recovery can still remain constructive, however, longs must tread cautiously.

Bias:Neutral/Bullish

Resistance: .9310-.9326**, .9400-.9410***

Pivot: .9210-.9232

Support: .9140-.9162**, .90785-9091**, .9037**, .8998.9002***

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Aussie (March)

Fundamentals:The Aussie was trading on soft footing through the day with the U.S Dollar holding ground to higher and after news that a bipartisan group of lawmakers in Washington introduced a bill that would ban the sale of U.S chips and other components to Chinese companies that violate export control laws such as Huawei and ZTE. Remember, China is Australias number one trade partner and the Aussie has kept a pulse on U.S and China trade relations. So, when it was reported late this afternoon that the U.S is weighing lifting the trade tariffs on China, the Aussie ripped higher. These reports were denied by the Treasury and the U.S Trade Reps office but the currency was able to cling to a small gain on the electronic session. Aussie Home Loans data contracted last night but better than expected. Tonight, we look to New Home Sales.

Technicals:Price action is overextended and faces major three-star resistance overhead at .7254-.7278. While we have recently had a Bullish Bias, given such overhead, we are more Neutral currently. Still, the bulls have a clear upper hand above our pivot at .7178-.7186. We maintain that value for a buy opportunity does not come in until lower at .7118-.7132.

Bias:Neutral/Bullish

Resistance: .7254-.7278***, .7407****

Pivot: .7178-.7186

Support: .7118-.7132**, .7036-.7050***, .6809****

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Canadian (March)

Fundamentals:Despite a robust risk-sentiment today, the Canadian slipped after ADP Payrolls showed a decrease in jobs, the first since August. The Canadian has rallied strongly to start the year seeing a tailwind from the trade landscape, a bounce in equity markets and most importantly a recovery in the energy bloodbath. However, this move has exhausted itself and we prefer to tread cautiously until it comes in. Price action did respond to the reported comments on U.S tariffs on China, but the tape slipped ahead of the electronic close on a denial.

Technicals:All in all, price action has held the pivot level of .7536 and this leaves the bulls with the upper hand. On the bright side, todays low was .75185 which was nearly a direct test to major three-star support at .7497. The tape responded off this low and remains constructive.

Bias:Neutral/Bullish

Resistance: .7588-.7615***, .7649**

Pivot: .7536

Support: .7497***, .7452-.7465**, .7330-.7383***, .72535***


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Futures trading involves substantial risk of loss and may not be suitable for all investors. Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results.