Daily forex rundown: Euro, yen, Aussie & CAD

Euro (March)

Session close (Tuesday, March 13): Settled at 1.2402, up 60.5 ticks.

Fundamentals: This was another constructive session for the Euro on disappointing U.S. data and drama in Washington. First, Core CPI was in line with expectations at 0.2% MoM and 1.8% YoY, however, this was slower than January and December. Considering the more hawkish tone from the Fed on inflation prospects, this is considered a disappointing read for many as it also places more emphasis on the non-existent wage growth. Now to the meat of the day, President Trump dismissed Secretary of State Rex Tillerson from his post. This added to pressures in the Dollar due to the uncertainty of his replacement Mike Pompeo.

While Pompeo, a proven leader, is the moving over from the CIA Director position, it still presents tactical uncertainties where Tillerson had been the driving force on; North Korea, Russia, China, etc. For us, the combination of the two events today is a reason to believe the Dollar will trend lower into next week’s Fed rate hike meeting. Tomorrow will be a pivotal day in confirming the resumption of this trend; German CPI data is at 2:00 a.m. Central, European Central Bank President Draghi speaks at 3:00 a.m. Central, Eurozone Employment and Industrial Production data are at 5:00 a.m. Central. Out of the United States, PPI and Retail Sales are at 7:30 a.m. Central and Business Inventories data is at 9:00 a.m. Central.

Technicals: Today’s session was a clear win for the bull camp and lays the groundwork for follow through in the coming sessions. Still, first key resistance comes in at... 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 .9284, down 22 ticks. 

Fundamentals: The yen was slammed overnight, trading to the lowest level since Feb. 28 as U.S. equity markets ground higher into the morning. There was a clear risk-on environment and gold had also taken a bit of a bath ahead of U.S. CPI data. However, the tables turned quickly and the Yen which was down nearly a whole point retested unchanged before the session was finished. U.S. CPI data slowed MoM which hit the Dollar pinning more of an emphasis on the bad wage growth read. Right around the same time, it was announced that Rex Tillerson was relieved of his position as Secretary of State. Equity markets shook off the news initially but got hammered as the day unfolded and the emphasis on China trade tariffs gained traction. With a weaker dollar and uncertainty brewing once again in equities, the safe-haven trade regained its wings. The next 24 hours will be critical, but after turning more Neutral yesterday, we now have reason to believe the path of least resistance is again higher for the yen. Core Machinery data is due at 6:50 p.m. Central and the Bank of Japan Minutes from the previous policy meeting are due at the same time. We look forward to data out of China tonight that includes Fixed Asset Investment, Industrial Production and Retail Sales.

Technicals: Price action recovered sharply today but faces a strong first key resistance as a hurdle. Getting out above here would spark further buying....  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 .7867, down 1 tick

Fundamentals: The Aussie had a choppy overnight session that handled a weak read on Home Loans data fairly well. The tape moved higher as the U.S. dollar weakened on the CPI read and the Tillerson news. However, the session turned volatile as equity markets went south in a risk-off environment due to drama and Washington and the announcement of $60 billion in tariffs on Chinese goods which could hit home for the Aussie. Westpac Consumer Sentiment is due tonight at 6:30 p.m. Central. The major focus is Fixed Asset Investment and Industrial Production data out of China. 

Technicals: The turn lower is now testing major three-star support and this, as we said yesterday, is critical to hold in order for bulls to maintain the upper hand...  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 .7728, down 66 ticks

Fundamentals: While the Canadian initially capitalized on the weaker Dollar, it turned lower in a hurry on comments from Bank of Canada Governor Poloz. The chief was dovish and focused on the trade debate. The second leg lower came later in the session as equity markets also lost significant ground. Though the Canadian is weak, the U.S. dollar is likely to weaken ahead of next week’s Fed hike and this should keep the downside limited in the near-term.

Technicals: The market is testing first key support which was the recent low. A close below this level will keep the sellers in the driver’s seat but...  Please sign up for a Free Trial at Blue Line Futures to view our entire technical outlook and proprietary bias and levels.