Session close (Wednesday, April 11): Settled at 1.24225, up 1.5 ticks
Fundamentals: The euro grinded slightly higher through the night as a decision on Syria by the White House was expected and weighed on an already weak U.S. dollar. This morning, comments from ECB President Mario Draghi were supportive as he expressed little concern as to the direct effects of trade tariffs announced by the U.S. and China. However, he eluded to this potentially eroding investor confidence.
Additionally, ECB official Hansson commented that factors weighing on inflation are “temporary in nature”. The euro has been doing well in finding a path of least resistance higher and tweets from President Trump this morning leaned further support to a session high of 1.2458 ahead of U.S CPI data. The main read, Core CPI, was in line with expectations. However, the headline MoM read fell short at -0.1%. The Euro matched the session high on this, but price action dissipated through the day as traders awaited the FOMC Minutes. These Minutes were hawkish in nature as most Federal Reserve officials agreed that a stronger economic outlook and higher inflation reads (Core CPI YoY was inline at 2.1% today) have paved the way to their 2% inflation target.
Additionally, they view first quarter weakness as transitory. Overall, the Minutes were hawkish and brought the euro back to unchanged on the session. Traders must keep an eye on the White House’s response to the Syrian conflict which could be as early as tonight; depending on such, this could weigh on the dollar. Tomorrow will be pivotal early with French CPI due at 1:45 am CT, Eurozone Industrial at 4:00 am and most importantly the ECB Monetary Policy Meeting Minutes at 6:30 am CT. German Bundesbank President and Draghi’s potential replacement, Weidmann, speaks at 11:00 am CT. For the U.S, weekly Jobless Claims and Import/Export Price Index is due at 7:30 am CT.
Technicals: Price action traded to a session high of 1.2458 but failed to close out above first key resistance at ... Please sign up for a Free Trial at Blue Line Futures to view our entire technical outlook and proprietary bias and levels.
Session close: Settled at .9391, up 19.5 ticks
Fundamentals: The yen has stayed contained within a range of one penny since Thursday. As we have discussed all week, the daily fluctuations have been more of an inverse byproduct of stock market volatility. However, the Bank of Japan has tried to signal a slower time-frame of tightening than initially believed in January and February. Regardless, they will be tightening but it remains to be seen if the equity market volatility and geopolitical tensions are the only thing keeping the Yen from correcting further. We do view more fundamental upside for the yen in the months to come but remain cautious in the near term. Bank of Japan Governor Kuroda speaks tonight at 7:30 pm CTand there is a 30-year JGP auction at 10:45 pm CT.
Technicals: There seems to be an attempt at building a base above major three-star support at ... Please sign up for a Free Trial at Blue Line Futures to view our entire technical outlook and proprietary bias and levels.
Session close: Settled at .7759, down 9 ticks
Fundamentals: The Aussie traded lower through the evening on weak Westpac Consumer Sentiment and China CPI and PPI data. A weaker dollar and strong commodity prices helped lift the Aussie from its overnight low to new session highs. Trade war fears are not a concern right now and it does not appear that the Syrian conflict is either. Tonight, MI Inflation Expectations are due at 8:00 pm CT and Home Loans data at 8:30 pm.
Technicals: We remain cautious the Aussie as it has taken too long to ... Please sign up for a Free Trial at Blue Line Futures to view our entire technical outlook and proprietary bias and levels.
Session close: Settled at .7959, up 8.5 ticks
Fundamentals: The Canadian dollar spiked to a new swing high as crude oil extended gains. The EIA inventory report was not bullish for Crude, however, the Syrian conflict seemed to take a more abrupt turn shortly after the release of inventory data. The Canadian held ground extremely well given the more hawkish FOMC Minutes. Price action in recent days and weeks is about constructive as it comes on fundamental developments and we expect this to hold.
Technicals: We remain outright Bullish in Bias the Canadian as long as it can maintain a close.