Daily forex rundown: Euro, yen, Aussie & CAD

Euro (March)

Session close settled at 1.20845, up 78.5 ticks.

Fundamentals: The euro shot higher this morning on the release of the ECB Monetary Minutes. Here they introduced the likeliness of changing the verbiage in their policy statement to signal a reduction of their stimulus program. Mario Draghi and the ECB have played this well, very well. They want the euro to go higher, just not too quickly. We at Blue Line have been calling for a more hawkish ECB and the stronger data over the last six months is undeniable. After a somewhat more neutral December meeting than many expected, they knew these minutes would be able to play a pivotal role in January ahead of their meeting in two weeks. Bravo. Providing further support for the euro today was a poor read on U.S. PPI and weekly Jobless Claims. NY Fed President Bill Dudley did take a hawkish approach today discussing the potential of overheating the economy with recent tax-cuts, but the euro held ground strong. We have been awaiting tomorrow’s data all week. Early we have regional inflation reads from France and Spain. The main event is U.S. CPI and Retail Sales at 7:30 am CT. Business Inventories are due at 9:00 and German Bundesbank President Weidmann speaks at 10:30 am CT.

Technicals: As we discussed yesterday, price action in that session was very constructive despite the frothy close. Throw in a healthy dose of fundamentals... Please sign up for a Free Trial on Blue Line Futures to view our entire technical outlook and proprietary bias and levels. 

Yen (March)

Session close settled at .9033, gained 21 ticks.

Fundamentals: The yen held ground very well today. Typically, we see this currency back off a rally when Japanese and U.S. equity markets extend gains, and this was not the case today. The news we got this week from the Bank of Japan trimming purchases of bond issues longer than 10 years has sent shockwaves through the treasury markets. Tomorrow’s U.S. CPI at 7:30 am CT will be critical in confirming or denying this week’s move in rates. Furthermore, confirming or denying a good portion of this week’s gain in the yen. Still, tonight we have Current Account, and Foreign Investment data from Japan at 5:50 pm CT. Trade Balance data from China is due at 10:45.

Technicals: Price action is hanging strong for the third session in a row, a rarity for the recent yen trade.

Aussie (March)

Session close settled at .7891, up 56 ticks

Fundamentals: Aussie Retail Sales data crushed expectations last night and price action is showing this directly. Although, the secondary rally did not occur until the dollar weakened on poor PPI data. Tonight, Chinese Trade Balance due at 10:45 pm CT will be key for an Aussie which is trying to climb and hold the highest level since September.

Technicals: Price action is pushing through major three-star resistance but also faces a resistance band from September’s selloff in this area.

Canadian (March)

Session close settled at .79905, up 33 ticks

Fundamentals: The Canadian used today’s session to work higher from yesterday’s sharp hit on NAFTA speculation. Just as we discussed yesterday, President Trump is working to get the best deal he sees fit and he is playing it tough; we believe a deal will get done. Furthermore, on fundamentals, we believe the Canadian should be trading well above .8000. Today’s New Housing Price Index missed the mark. Crude oil extended higher and helped keep the sellers in the Canadian at bay. Tomorrow morning will be about U.S. data.

Technicals: Price action stayed afloat above first support for much of the session despite an early dip to a low of .79485 and a rejection of major three-star support at...  Please sign up for a Free Trial on Blue Line Futures to view our entire technical outlook and proprietary bias and levels.