Ahead of the Fed
FX Rundown

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Euro (June)

Session close:1.17545, down 38.5 ticks

Fundamentals:The Euro lost ground today and the only surprise was how long it took to break. Price action traded to its third lower peak, and topped at 1.18145 at 3:00 am CT. Shortly after, German ZEW Sentiment worsened more than expected, coming in at the lowest level since September 2012; still, the Euro held ground. Later in the morning, U.S CPI came in very solid and was considered marginally better than expectations; still the Euro held ground. However, shortly before noon CT, that ground gave way and Euro fell more than half a penny to a session low of 1.17375. This move coincided with a report that Fed Chair Powell is looking into holding a press conference after each meeting. Now, we do not believe this was a catalyst for weakness. However, given the data earlier and the Fed rate-hike meeting tomorrow, the market used Powell potentially making each meeting a live meeting going forward as an excuse to finally lift the Dollar. Buyers of the Euro must be cautious going into and after the FOMC Meeting at 1:00 pm CT tomorrow. Just as we discussed on Sundays Tradable Events this Week we could see Dollar strength first on a hawkish Fed before Euro strength on a more hawkish ECB. Tomorrow brings Eurozone Employment Change at 4:00 am CT along with Industrial Production data. The lesser followed inflation read, U.S PPI is due tomorrow at 7:30 am CT.

Technicals:The technicals have been tremendous. Minor support at 1.17775-1.17815 has been a pivotal level beginning with last night as news was coming out of the Singapore Summit. After the Euro regained 1.18 this morning, that minor support brought a floor until the noon drop. 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.

Yen (June)

Session close:Settled at .90665, down 26.5 ticks

Fundamentals:The Yen sold off after reopening last night and stayed below the open through the session. Despite stronger than expected PPI out of Japan, Manufacturing Conditions data badly missed. However, data is lesser of a concern than safe-haven demand and the direction of the U.S Dollar. With positive momentum out of the Singapore Summit, a solid to better U.S CPI read and equites holding against record levels, the Yen is under outright pressure. It is unlikely that the Federal Reserve tomorrow is more dovish than expected, however, a more hawkish shift could scare equity investors, and this would bring support to the Yen. For now, the path of least resistance remains lower.

Technicals:The Yen traded through first key support last night and has since used that level as a resistance barrier. The path of least resistance is clearly lower, but the May 21st low aligns with support at .8992-.89975 and just below there is a huge level 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 .7571, down 34 ticks

Fundamentals:The Aussie treaded water through noon today but was ultimately a casualty of a stronger U.S Dollar ahead of tomorrows FOMC Meeting. Last night, Home Loans data beat expectations but Business Confidence missed. We continue to be a strong believer in the Aussie, but as discussed yesterday, the trade will be very choppy given the trio of central bank policy meetings. Tonight, we look to Consumer Sentiment at 7:30 pm CT and RBA Governor Lowe at 9:00 pm CT. We expect to begin hearing a more hawkish tone from the RBA given recent economic data.

Technicals:We said yesterday that a close below major three-star support due to U.S Dollar strength will put the Aussie on its back foot for a few sessions and that is what we are seeing today. We remain very upbeat in the long-term and look for positive momentum upon a close back above ...Please sign up for a Free Trial at Blue Line Futures to view our entire technical outlook and proprietary bias and levels.

Canadian (June)

Yesterdays close:Settled at .76825 down 18.5 ticks

Fundamentals:There was no fresh data out of Canada today to send the currency lower; economic data has been awful as of late. Ultimately, it held ground relative well when compared to other currencies against the U.S Dollar who are catching up a bit to the downside on todays U.S Dollar strength. Tomorrow will be a very U.S Dollar driven session with the FOMC at 1:00 pm CT.

Technicals:The tape has been very weak, but the downside is beginning to feel a bit exhausted as bad news is not breaking recent lows. First key support aligns previous swing lows, but the real level traders need to watch is ...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.