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FX Rundown

Euro (June)

 

Session close: Settled at 1.1271, up 84

 

Fundamentals: Deteriorating global conditions are now being led by the U.S. The Eurozone has displayed dismal growth for months, but the U.S had been shaking the broader trend. Going back to May 23rd, U.S Manufacturing PMI surprised to the downside and today’s final May read matched the worst on record at 50.5. ISM Manufacturing was also weaker than expectations. Although the Eurozone reads were worse, there is more downside for the U.S to now be priced in as rate-cut expectations skyrocket. In fact, there is now a 97.9% probability the Fed cuts rates by 25 basis points and an 84.4% probability they cut by 50 basis this year. The U.S 10-year Note is hovering just above 2%, at the lowest level since September 2017. The 10-year’s 0.5% slide in about five weeks forces the currency side to reposition. Today, the dovish St. Louis Fed President Bullard said a “downward policy adjustment may be warranted soon”. Furthermore, the Euro rejected a technical floor and this overall landscape sets it up for additional gains. Tomorrow morning, we look to prelim Eurozone CPI at 4:00 am CT. Chicago Fed President Evans speaks around 7:00 am CT, NY Fed President Williams speaks at 7:30 am CT and all eyes will be on Fed Chair Powell at 8:45 am CT. Factor Orders will be watched closely at 9:00 am CT on the heels of dismal manufacturing reads and Fed Governor Brainard speaks at 2:45 pm CT.

 

Technicals: Price action in the Euro has rejected support at the 1.11565 region, ripping to its highest settlement since April 22nd. It has not broken the intermediate-term downtrend line which aligns with major three-star resistance at ... Please sign up for a Free Trial at Blue Line Futures to view our entire technical outlook and proprietary bias and levels. 

 

 

 

 

Yen (June)

 

Session close: Settled at .9266, up 29.5

 

Fundamentals: The Yen broke out above major three-star resistance on Friday, gathering technical and fundamental steam through today’s session. Both Dollar weakness and deteriorating risk-sentiment helped to lift the Yen. Not only has the economic data turned sharply south, the beleaguered tech sector now holds tremendous headline risk. With odds racing to price in a rate-cut and the U.S 10-year Note nearing the psychological 2% mark, at some point the safe-haven trade will need to take a breather. Even still, pullbacks should prove to be buying opportunities up until the aftermath of a cut or economic growth beginning to show a stronger than anticipated expansion. There is a 10-year JGB auction tonight at 10:35 pm CT.

 

Technicals: Price action has succeeded through the first hurdle but now faces strong major three-star resistance at ... Please sign up for a Free Trial at Blue Line Futures to view our entire technical outlook and proprietary bias and levels.

 

 

 

 

Aussie (June)

 

Session close: Settled at .6982, up 39

 

Fundamentals: The RBA meets tonight and is expected to cut interest rates by 25 basis points. Given that the cut is priced in, what matters most tonight is the path that the committee sets for future cuts and the rhetoric in which they wrap it. The market is leaning towards at additional cuts this year and a more neutral statement. We expect the Aussie to react directly in relation to these expectations but the technicals must not be forgotten. Retail Sales is due at 8:30 pm CT, ahead of the policy decision at 11:30 pm CT.

 

Technicals: The Aussie has met strong support and could not chew through. It has been enjoying a relief rally over the last two trading sessions as the U.S Dollar lost ground. Major three-star 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.

 

 

 

 

Canadian (June)

 

Yesterday’s close: Settled at .7445, up 46.5

 

Fundamentals: What a rally for the Canadian in the face of immense weakness in the energy sector. Although RBC Manufacturing PMI contacted more than expected, it was the U.S Dollar that needed to catch up to rate cut expectations and deteriorating conditions. If commodity prices and risk sentiment cannot hold footing, look for these gains to sour quickly.

 

Technicals: Price action rejected the .7400 floor and settled today just above our pivot. There are two layers of resistance, but the big level up above does not come in until ... Please sign up for a Free Trial at Blue Line Futures to view our entire technical outlook and proprietary bias and levels.

 

 

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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.

 

 

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