Currency Playbook - Blue Line FX Rundown
FX Rundown

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Euro (September)

Session close:Settled at 1.1476, up 31.5 ticks

Fundamentals:U.S Dollar weakness through Friday pushed the Euro out above a significant resistance level that aligned with the 100-day moving average and today there was follow-through. We say U.S Dollar weakness was the catalyst for Euro strength because it certainly wasnt bullish developments in Europe. Although Flash PMIs on Friday werent overall as bad as analysts had expected the German Manufacturing read still contracted for the sixth straight month and the Eurozone number was shy of low expectations. Furthermore, Climate data through the week was overall underwhelming. The backend of this week will rely heavily on the U.S and China trade talks at the G-20 Summit and safe haven premium coming in or going out of the Dollar. Tomorrows economic calendar is quiet in Europe, but we look to packed lineup in U.S hours. NY Fed President Williams speaks at 7:45 am CT, Case Shiller is released at 8:00 am CT and Consumer Confidence is due at 9:00 along with New Home Sales. Atlanta Fed President Bostic speaks at 11:00 am CT, there is a 2-year Note auction at noon CT and Fed Chair Powell also speaks then.

Technicals:Friday was the first front-month close above the 100-day moving average for the Euro since September. A continued close above our pivot of ...Please sign up for a Free Trial at Blue Line Futures to view our entire technical outlook and actionable bias and levels.

Yen (September)

Session close:Settled at .93755, up 7.5 ticks

Fundamentals:The Yen is basking in Dollar weakness and low rates topped off with a Bank of Japan that left policy unchanged. The biggest fear for Dollar bears right now is that if Federal Reserve dovishness paves the way for broadly looser central bank policy elsewhere. That is potentially lesser of a concern when talking about the Bank of Japan which already has their benchmark rate at -0.10% and has been steering loose policy with diminishing returns for the more than two decades. Still, the bank said its ready to act if needed. For now, as long as the U.S 10-year Treasury stays closely tied to 2%, the path of least resistance in the Yen is higher.

Technicals:The Dollar is breaking down and the Yen has been rising since equity markets peaked in late April. Keep a close eye on the Russell 2000 whose 50-day moving average is crossing below the 100-day today and this could signal that equities are getting tired up here. This would be a great development for the Yen which is steadily consolidating above resistance and sitting in breakout territory. We are Bullish the Yen and the path of least resistance is higher as long as it stays above ...Please sign up for a Free Trial at Blue Line Futures to view our entire technical outlook and actionable bias and levels.

Aussie (September)

Session close:Settled at .6984, up 40 ticks

Fundamentals:The Aussie is enjoying a bit of relief supported by U.S Dollar weakness and as shorts cover ahead of U.S and China trade talks at the G-20 Summit. The Federal Reserve policy shift, which was widely expected and seemingly priced-in, has brought it more closely aligned with that of the RBA who had already cut rates earlier in the month. When this week concludes, the Aussie would have relied heavily on the developments between the two leaders at the G-20 Summit. The interesting thing is that Leveraged traders are not leaning one way or another after such a sharp decline in the Aussie. Typically, you see those Leveraged traders attempt to squeeze the last bit of juice from the orange. This leads us to believe that negative developments could have catastrophic effect on the price of the Aussie.

Technicals:We mentioned the supply demand technicals above and this exemplifies how we could see renewed selling and quick in the Aussie upon bad developments at the G-20. Price action could not chew through major three-star support at ....Please sign up for a Free Trial at Blue Line Futures to view our entire technical outlook and actionable bias and levels.

Canadian (September)

Session close:Settled at .7595, up 12 ticks

Fundamentals:Yes, the Canadian has seen not only support from the weaker U.S Dollar but tremendous strength in Crude Oil. However, its gains stalled Friday for the exact reason we have highlighted right here; inconsistent or poor data. On Friday, Retail Sales was the latest data point to disappoint and price action will not be able to sustain a recovery if this continues. For now, while U.S Dollar weakness is fresh, if Crude continues to strengthen and we see positive developments at the G-20 the Canadian will find itself higher. At that point if the data continues to be poor, it should provide for a good fade. Wholesale Sales are due tomorrow at 7:30 am CT>

Technicals:Price action is out above the 50, 100 and 200-day moving averages. This provides a ...Please sign up for a Free Trial at Blue Line Futures to view our entire technical outlook and actionable 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.