Breakouts vs the Dollar
Bill Baruch of Blue Line Futures - InsideFutures.com - Tue Jan 02, 4:38PM CST
FX Rundown

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Euro (March)

Session close:Gained 30.5 ticks on the session settling at 1.2106

Fundamentals:The Euro is at the highest level since September after a strong close to 2017 and start to 2018. Much of this move can be characterized by Dollar weakness. Remember we have been hammering home the idea that the Federal Reserve will not tighten policy at a faster pace than already priced in, however, the pairs that the currency trades against, their central banks are likely to tighten at a pace faster than already priced in. ECB members Nowotny and Coeure both eluded to the ECB allowing its bond purchase program to running out after its scheduled September 2018 end date instead of rolling it out once again. We believe that the market has only begun pricing this in. Its a big first week of the year with ISM Manufacturing and FOMC Minutes tomorrow. But first we have Unemployment data from Spain due at 2:00 am CT and Germany at 3:00 am CT. Of course, the gem of the week is Nonfarm Payroll, but Eurozone reads on CPI and PPI on Thursday should not be overlooked.

Technicals:The Euro broke out above major three-star resistance at 1.20435 on Friday and extended gains to a high of 1.2135 today before settling back in...Please sign up for a Free Trial of 1 or all 5 of our daily reports to view our entire technical outlook and proprietary bias and levels.

Yen (March)

Session close:Gained 26.5 ticks on the session settling at .89405

Fundamentals:The Yen put in a strong session on U.S Dollar weakness despite higher U.S Treasury yields, equity prices and a strong read on Chinese Caixin Manufacturing. Right now, the Dollar is the dog and didnt even get much of a bump on tax-reform, instead it merely paused the selling. There is no major data coming out of Japan this week and data out of the U.S will be critical for the trade; ISM Manufacturing is due at 9:00 am CT tomorrow and FOMC Minutes at 1:00 pm CT.

Technicals:On Friday, the Yen nudged out a close above R1, and though it was not convincingly done, todays hold against it and follow through gives the bulls what they needed.Please sign up for a Free Trial of 1 or all 5 of our daily reports to view our entire technical outlook and proprietary bias and levels.

Aussie (March)

Session close:Gained 19 ticks on the session settling at .7830

Fundamentals:The Aussie put in another session of gains, its 13th in the last 15. Strong Chinese Caixin Manufacturing and Aussie AIG Manufacturing last night helped the New Year start off on a positive note. Further boosting the Aussie was another strong session for the metals complex. Tomorrow will be very US Dollar centric for the trade.

Technicals:The Aussie stayed above the .78 mark for much of the session and faces critical three-star resistance about .5% higher.Please sign up for a Free Trial of 1 or all 5 of our daily reports to view our entire technical outlook and proprietary bias and levels.

Canadian (March)

Session close:Gained 13 ticks on the session settling at .8003

Fundamentals:The Canadian extended gains after breaking out above its two-month sideways consolidation late last week. Prices remain elevated on a weak Dollar and strength in the Energy sector with Crude above $60. Tomorrows trade will revolve around the U.S Dollar but Thursday brings the RMPI read, Raw Materials Purchase Index which is a read on inflation, and Friday is Canadian jobs (along with U.S Nonfarm).

Technicals:Yes, the Canadian is enjoying momentum from its bullish breakout, but the trade is essentially in overbought territory and due for a consolidation.Please sign up for a Free Trial of 1 or all 5 of our daily reports to view our entire technical outlook and proprietary bias and levels.
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