Tag Archives: Canadian Dollar

Currencies: Dollar Getting Support from Euro-Zone; Waiting on FOMC

by on January 25, 2012

Below is a sample of The Hightower Report’s Daily Commentary. To get this comment, and our daily coverage of 15 additional markets and trade ideas, visit futures-research.com for your free 2 week trial!

DOLLAR: The Dollar has ground out a moderate gain this morning as prices are holding well above this week’s lows. While the market appears to be getting used to unresolved debt problems in Europe, attention will shift back to the US later on during today’s session. Post-meeting comments from the FOMC could erode a portion of the Dollar’s recent support, especially if the Fed points towards more accommodative US monetary policy during the near future. A private survey of US housing could also provide further direction for the Dollar if there are surprisingly positive results on a report that is expected to be softer but the market may ultimately be waiting to see the Fed’s outlook before letting the Dollar put together any substantial recovery. The Dollar may find resistance near the 80.50 level during today’s session, and it may be able to extend today’s rebound if the Fed meeting results do not erode market sentiment.

EURO: The March Euro failed to benefit from decent economic data out of Germany and has slid back below the 130.00 level this morning. The failure to finalize a Greek debt swap deal has become a serious impediment to any further recovery in the Euro, and that news has certainly kept risk concerns at elevated levels. If Euro zone nations start to have problems with the market taking down their debt at upcoming auctions, the March Euro could end up revisiting the mid-January lows again during the near future. The March Euro may find support near the 129.25 level today, and it will need some sense of resolution with peripheral EU debt problems in order to revive this month’s recovery.

YEN: The March Yen remains in a tailspin this morning, as prices have fallen to their lowest levels since mid-December. Last night’s Japanese Trade numbers confirmed market expectations of Japan’s first annual trade deficit in over three decades, which for their export-driven economy has underscored the sluggish conditions in Japan right now. Japanese authorities may be keeping their powder dry, with the market doing their job of weakening the Yen, but any intervention at this point would send prices back towards the late October lows in a hurry. The March Yen may find support at the 127.85 level today, and it should remain on the defensive during the balance of today’s session.

SWISS: The March Swiss has come under pressure this morning from Euro zone debt anxiety but may find support near the recent lows, as the market may be looking forward to a test of the 1.20 Swiss/Euro rate, that the Swiss National Bank has vowed to defend. While any breakthrough is unlikely, look for the Swiss to outperform the Euro, as long as Greek debt concerns weigh on market sentiment. The March Swiss may find support near the 107.00 level and it is likely to stay well below this week’s highs as long as Euro zone debt problems hold onto the market’s attention.

POUND: The March Pound is holding up fairly well considering the negative impact of today’s weak UK GDP number, as well as the reaction to the Bank of England meeting minutes that may be pointing towards fresh quantitative easing measures during the near future. If macro-economic sentiment can produce a rebound later on during the session, the March Pound could rally back into new high ground for this current rally. The March Pound may find resistance at the 156.00 level and may be on track to post a new 2012 high, if today’s intra-day recovery gains further momentum.

CANADIAN DOLLAR: The March Canadian has fallen well below Monday’s 21/2 month highs as yesterday’s Canadian Retail Sales numbers highlighted the lukewarm tone of recent economic data. If the March Canadian is to be more reliant on commodity and equity markets to extend this rally, any chance of a rebound today may have to wait until FOMC post-meeting comments are out of the way. The March Canadian may find support near the 98.25 level this morning and it may need to see a broad-market turnaround in order to retest this week’s highs.

TODAY’S MARKET IDEAS: The Dollar should find enough support from ongoing Euro zone anxiety to hold onto early gains but could fall back towards this week’s lows if the market receives post-FOMC meeting comments as a sign of easier US monetary policy in the near future. If there is a widespread improvement with broad-markets sentiment later in the session, the March Pound could rally up towards a new weekly high.

Currencies: US Dollar Maintains Its Safe Haven Roll

by on November 15, 2011

Below is a sample of The Hightower Report’s Daily Commentary. To get this comment, and our daily coverage of 15 additional markets and trade ideas, visit futures-research.com for your free 2 week trial!

DOLLAR: The Dollar remains in safe-haven mode this morning as overseas risk concerns continue to smolder. While there has been no “watershed” event that has reinforced Dollar support, a clear lack of confidence with Euro zone debt solutions has lifted prices back towards last week’s highs. US economic data this morning could ease concerns on this side of the Atlantic but market focus is likely to remain on the Euro zone. The most recent Commitment of Traders report indicated that non-Commercial traders were trimming their net-long Dollar position as of last Tuesday, even as the market was heading up into new high ground. The Dollar is likely to remain well supported at these levels unless there is a major improvement in macro-economic sentiment during the near future. The Dollar may find resistance near the 78.20 level this morning and is likely to gain ground as EU debt problems dominate the markets. The Commitments of Traders Futures and Options report as of November 8th for US Dollar showed Non-Commercial traders were net long 22,088 contracts, a decrease of 1,796 contracts. The Commercial traders were net short 25,431 contracts, a decrease of 1,368 contracts. The Non-reportable traders were net long 3,343 contracts, an increase of 428 contracts. Non-Commercial and Non-reportable combined traders held a net long position of 25,431 contracts. This represents a decrease of 1,368 contracts in the net long position held by these traders.

EURO: The Dec Euro has been on the defensive this morning, unable to find benefit from well-received GDP numbers out of Germany and France. Ongoing EU debt problems continue to drag prices lower, as recent optimism with Italian and Greek government changes has evaporated quickly. The most recent Commitment of Traders report showed that non-Commercial traders were reducing their net-short Euro position as of last Tuesday, even as the market was sliding down to new lows for November. Unless there is some market confidence in an eventual resolution with these debt problems, the Dec Euro will have difficulty regaining these recent losses. The Dec Euro may find support near the 135.00 level, and could be one negative news headline away from posting a new low for this sell off. The Commitments of Traders Futures and Options report as of November 8th for Euro showed Non-Commercial traders were net short 48,250 contracts, a decrease of 6,280 contracts. The Commercial traders were net long 77,113 contracts, a decrease of 984 contracts. The Non-reportable traders were net short 28,863 contracts, an increase of 5,296 contracts. Non-Commercial and Non-reportable combined traders held a net short position of 77,113 contracts. This represents a decrease of only 984 contracts in the net short position held by these traders.

YEN: The December Yen made a sizable recovery from overnight losses, and is climbing back towards the recent highs this morning. There is clearly a flight to safety out of the Euro zone that is providing fuel for this rebound but the shadow of potential intervention will hang over the market as prices continue to climb higher. The December Yen may find resistance near the 130.15 level, and is likely to stay below Monday’s high for the move unless the EU debt situation starts to unravel later on today.

SWISS: The Dec Swiss has been in a tailspin this morning, with prices reaching their lowest levels since mid-October. A comment from a Swiss National Bank official that the Swiss Franc was “still very strong” has revived ideas that the current “peg” with the Euro may be raised to 1.25 or higher. The December Swiss may find support near the 109.00 level and will remain under pressure as long as the market feels that a “peg” change may be on the near-term horizon.

POUND: The Dec Pound finally made a downside breakout this morning, although prices have seen little follow-through to the downside. Today UK CPI numbers were weaker than expected, which may encourage the Bank of England to become more aggressive with their quantitative easing measures. The Dec Pound may find support near the 158.30 level, and may have trouble putting together a recovery unless the EU debt situation provides some signs of progress.

CANADIAN DOLLAR: The Dec Canadian has been pressured by weak commodity and equity markets, and has found little relief from sluggish Canadian economic data. Unless there is a turnaround in market sentiment, the Dec Canadian is likely to make new lows for this sell off. The Dec Canadian may find support near the 97.35 level today, and could see heavier losses if outside markets continue to deteriorate.

TODAY’S MARKET IDEAS: The Dollar should hold onto this morning’s gains through the balance of today’s session, although any improvement in market sentiment could bring this rally to a quick halt. If sentiment remains negative during the session, the Dec Swiss could extend today’s slide to a fresh low for the move.

FOREX: Euro Vulnerable to Negative Sovereign Debt News

by on July 14, 2011

Below is a sample of The Hightower Report’s Daily Commentary. To get this comment, and our daily coverage of 15 additional markets and trade ideas, visit futures-research.com for your free 2 week trial!

DOLLAR: The Dollar has made a large recovery from overnight lows but remains in negative territory in what has already been a turbulent session so far. With Fed Chairman Bernanke putting the Dollar on the defensive with hints of new quantitative easing, a credit rating agency warning for the US if the debt ceiling is not increased added further pressure to the market. A huge reversal during Asian trading provided some strength to the Dollar, but sentiment remains weak coming into this morning. Today’s US data may provide some support if the numbers exceed expectations, but the market may focus on Fed Chairman Bernanke’s Senate testimony to find further clarity on the potential for upcoming quantitative easing. The Dollar may find support near the 75.15 level this morning, and may need the market’s focus to shift back towards overseas problems in order to put together any extended recovery.

EURO: The Sept Euro was able to extend yesterday’s recovery but has fallen well back of the overnight highs this morning. Chairman Bernanke’s testimony and the US credit rating warning took the market’s attention away from a still problematic sovereign debt situation for the Euro zone. Today’s Italian debt auction had the highest 15-year yields on record, indicating there is still a large concern with contagion of this debt crisis. With one credit rating agency giving Greece the lowest debt rating in the world, there is still a large chance of this week’s rebound reversing to the downside. The Sept Euro may find resistance near the 141.90 level but needs some positive news on the sovereign debt front to hold onto these recent gains.

YEN: The September Yen posted a massive overnight range, and has traded back toward unchanged levels coming into this morning. Flight to quality out of the US and the Euro zone drove the market up to 4-month highs, but a huge selloff in Asian trading sent the market into a nosedive. There has been no official confirmation of intervention last night but the Bank of Japan may be ready at any time to sell the Yen at these current levels. The Sept Yen may find support near the 126.40 level, and may be vulnerable to further losses if central banks start to intervene against the Yen.

SWISS: The Sept Swiss built on yesterday’s huge gains with a large overnight rally, moving well beyond the previous record highs. Safe haven support from the Euro zone and the US clearly has been the main supportive factor for this rally, but a sizable pullback from the overnight highs may be a sign that this week’s upmove may have lost momentum. Swiss National Bank officials were already hinting at intervention when the Sept Swiss was below 121.00, so potential longs should be cautious now that market is far above that area. The Sept Swiss may find support near 122.40, and may need an additional risk flare-up in order to retest today’s new record high.

POUND: The Sept Pound made a 3-week high early in today’s session but is sliding back towards unchanged levels. Sluggish UK economic data has undermined the case for Bank of England rate hikes, so prices may be vulnerable to a sharp selloff if Euro zone debt problems regain the market’s focus. The Sept Pound may find support near the 160.80 level, and will need positive UK economic news in order to climb back towards the overnight highs.

CANADIAN DOLLAR: The Sept Canadian was able to post a new 2-month high today, but lukewarm commodity markets have weakened this current recovery rally. With few major Canadian economic numbers until next week, the Sept Canadian may have to depend on the strength of crude oil and gold to hold onto these recent gains. The Sept Canadian may find support near the 103.85 level this morning, and may need a broad-based commodity rally in order to post a new high again today.

TODAY’S MARKET IDEAS: The Dollar will start out this morning in negative territory but a huge recovery from overnight lows could gain momentum if today’s US numbers are positively received by the market. The Sept Euro could see a sharp decline if there are any negative headlines on their sovereign debt crisis during the session.

Currencies: Dollar Gains Overnight but Will Have Trouble Extending

by on April 5, 2011

Below is a sample of The Hightower Report’s Daily Commentary. To get this comment, and our daily coverage of 15 additional markets and trade ideas, visit futures-research.com for your free 2 week trial!

DOLLAR: The Dollar has been able to grind out a modest gain this morning, and looks to be putting together a mild recovery from the recent lows. With few US economic numbers during the early part of this week, there may be added emphasis on the release of Fed minutes later today to gauge the likelihood of quantitative easing measures being extended, or if monetary policy may be tightened during the near future. Much of the market’s focus remains on overseas issues, but the Dollar appears to be finding some benefit from generally positive US data over the past few weeks. While there may be few data points for the Dollar to find support from during the next session or two, there may be enough uncertainty from overseas issues for prices to avoid another retest of the lows over the near future. The Dollar may find resistance near the 76.40 level this morning, but is likely to consolidate near these present prices levels as outside markets continue to hold the market’s attention.

EURO: The June Euro has come back on the defensive today, and has fallen back from yesterday’s highs for the move. A credit ratings downgrade on Portugal’s sovereign debt may not be much of a surprise to the market, but that action underscores the problems that peripheral EU nations may have with the ECB starting up a series of rate hikes. Today’s Euro zone Retail Sales number was lukewarm at best, but elevated inflation levels appear to be the key economic indicator for the market to watch for during the near future. The June Euro may find support near the 141.20 level during today’s session, but this sort of price action in front of Thursday’ ECB meeting could lead to an extended move to the downside.

YEN: The June Yen has come under heavy pressure in the wake of this morning’s Chinese rate hike, and is closing in on a new low for this sell off. Ongoing problems at the Fukushima power plant remain an issue for the June Yen, as overseas assets may wait to be repatriated until the crisis has reached some sort of conclusion. The June Yen may find support near the 118.25 level during today’s session, but will need to find some positive news in order to turn this sell off around.

SWISS: The June Swiss appears to be consolidating just above the 108.00 level, showing little reaction to developments with several risk flare-ups around the globe. While safe-haven support has kept the June Swiss at these elevated price levels, upcoming Swiss economic data will need to remain positive in order to avoid a retest of last week’s sharp sell off. The June Swiss may find resistance near the 108.50 level later on this morning, but may have trouble breaking out of this week’s trading range unless there is another risk event that starts to generate news headlines.

POUND: The June Pound put together a strong rally this morning, strengthened by a surprisingly good private survey of UK service industries. While today’s number may not have enough impact to change the Bank of England’s actions at this week’s meeting, a UK rate hike by this summer may not be out of the question. The June Pound may find resistance near the 162.25 level, but looks strong enough to hold prices well above last week’s trading range.

CANADIAN DOLLAR: The June Canadian has recovered from the overnight lows, but has fallen back below yesterday’s 31/2 year high for the move. Strong energy prices and recent strength in Canadian economic data should keep the June Canadian well supported at these levels. The June Canadian should find resistance near the 103.50 level, but may have trouble moving up into new high ground in the wake of this morning’s Chinese rate hikes.

TODAY’S MARKET IDEAS: The Dollar has been able to post a moderate gain this morning, but will have trouble extending this rebound with no US data and the market’s focus on overseas events. The June Pound may extend today’s rally further to the upside, finding benefit from strong UK data in front of the Bank of England meeting later on in the week.

Currency Market Commentary – 2011.01.18

by on January 18, 2011

Below is a sample of The Hightower Report’s Daily Commentary. To get this comment, and our daily coverage of 15 additional markets and trade ideas, visit futures-research.com for your free 2 week trial!

DOLLAR: The Dollar has come out of the holiday weekend under pressure, and has now reached the lowest price levels since mid-November. With the US markets fairly quiet since last week, a more positive tone from across the Atlantic has helped to keep the Dollar on the defensive this morning. Although most recent US economic indicators are pointing towards a steady recovery, the market will need to receive data over the next few sessions that can offset the disappointing numbers from late last week. The most recent Commitment of Traders reports showed that non-Commercial traders were shifting back into a net-long Dollar positions as of last Tuesday, but last week’s sharp drop in value may have changed that stance. The Dollar may find support near the 78.95 level this morning, but it will need market sentiment to drastically improve in order to post a strong rebound from these levels. The Commitments of Traders Futures and Options report as of January 11th for US Dollar showed Non-Commercial traders were net long 10,081 contracts, an increase of 11,353 contracts which represents a change from a net short to net long position. The Commercial traders were net short 14,135 contracts, an increase of 13,865 contracts. The Non-reportable traders were net long 4,053 contracts, an increase of 2,511 contracts. Non-Commercial and Non-reportable combined traders held a net long position of 14,134 contracts. This represents an increase of 13,864 contracts in the net long position held by these traders.

EURO: The March Euro continues to rebound from last week’s lows, as uncertainty regarding an increase to the EU’s rescue fund appears to have had little negative impact so far. Today’s Spanish T-Bill auction has extended a recent string of well received debt offerings, although the decision by several EU nations to sell their longer-term debt by syndicate, instead of through auctions put mild pressure on the March Euro during the early part of this week. A strong jump in a private survey of German economic sentiment has also provided a strong measure of support. The most recent Commitment of Traders reports showed that non-Commercial traders were building onto a net-short Euro position as of last Tuesday, which was at a point when the market was approaching 4-month lows. The March Euro may find resistance again near the 134.50 level this morning, but it appears likely to remain well supported through the balance of the session.
The Commitments of Traders Futures and Options report as of January 11th for Euro showed Non-Commercial traders were net short 42,822 contracts, an increase of 19,752 contracts. The Commercial traders were net long 49,870 contracts, an increase of 24,196 contracts. The Non-reportable traders were net short 7,048 contracts, an increase of 4,444 contracts. Non-Commercial and Non-reportable combined traders held a net short position of 49,870 contracts. This represents an increase of 24,196 contracts in the net short position held by these traders.

YEN: The March Yen has been able to overcome a weak Japanese Consumer Confidence number earlier in the week to move higher this morning. Lukewarm Japanese economic data and chronically low yields will likely weigh on the March Yen over the long run, but with the Dollar under pressure this morning, it is likely that this gradual rally will continue. The March Yen may test resistance near 121.50 today, but any stronger rally will require some improvement with Japanese economic conditions.

SWISS: The March Swiss has been able to grind out a moderate gain this morning, but the market remains down near the lower end of a huge sell off that started off 2011. The improving sentiment for the Euro zone has weighed on the March Swiss, and has eroded a large portion of the recent safe-haven support that took the market up to record high levels at the end of last year. The March Swiss may find resistance near the 104.75 level today, but may need a Euro zone risk flare-up in order to make a recovery back towards the recent highs.

POUND: Another very strong UK inflation number, this time a 1.0% increase in the CPI, has driven the March Pound up above the 160.00 level for the first time since mid-November. With the increasing chances that the Bank of England will lift UK rates, the March Pound is likely to be well supported over the near future. The March Pound may retest resistance near the 160.50 level this morning, but given the sharp rally over the past week, it may be vulnerable to a long liquidation sell off over the next day or two.

CANADIAN DOLLAR: The March Canadian has been able to recover from last week’s Chinese rate hikes, and has been able to post another new high for the move. What may be more significant is that these gains were made without much carryover support from physical commodity markets, which could be a strong indication that Canadian economic fundamentals may be taking the lead with this rally. The March Canadian could find resistance near the 101.80 level later today, but given the huge recovery from Friday’s lows the Canadian may have plenty more upside left in this current rally.

TODAY’S MARKET IDEAS: The Dollar is likely to be on the defensive early this morning, and will need US data to improve sentiment enough to avoid a new low for this sell off. The March Pound and March Canadian could post new highs for their respective up moves later on this morning.

Currency Market Commentary – 2010.12.30

by on December 30, 2010

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DOLLAR: The Dollar has been relatively quiet during the overnight session, but remains under moderate pressure this morning. With a lack of substantive news during the post-holiday period, the Dollar has been weakened by a series of well-received US Treasury note auctions over the past few days. During the current news “drought”, some traders have taken these results as evidence that US yields will remain low for an extended period. Today’s session will hopefully produce more substantive information for the market to digest, with several US economic numbers released during the first few hours. If today’s data can renew some confidence in the US economy, then the Dollar stands a reasonable chance of regaining some of this week’s lost ground. The Dollar may find support near the 79.80 level this morning, but thin trading conditions could lead to a further extension of this week’s lackluster sell off.

EURO: The March Euro continues to hold recent gains, proving the adage that “silence is golden”. Quiet from the problem areas of the EU has allowed the March Euro to rebound from the recent lows, even with the understanding that there are likely to be Euro zone risk flare-ups within the first few weeks of 2011. Today’s Italian debt auction may have eased some concerns with the level of participation during the holidays, but higher yields tend to paper over many potential problems. The March Euro could retest this week’s highs near the 132.75 level later today, but a strong move higher may require some further improvement with the underlying EU situation.

YEN: The March Yen has maintained a strong upward trajectory this week, and was able to reach up towards a 7-week high before giving back a portion of today’s gains during the past few hours. A large part of the recent strength in the March Yen may be due to short-covering and end-of-year repatriation of overseas funds, as recent Japanese data continues to point towards a weak economy. Sharp gains with the March Yen are not going to go over well with Japanese export firms, and pressure may come down on officials to take some action if this strength continues through the New Year. The March Yen could find resistance near the 123.05 level, but good US economic data this morning could turn this rally around.

SWISS: The March Swiss continues to rocket higher today, producing another new all-time high during overnight trading. This recent strength in the March Swiss may be a sign that market problems could occur soon after the New Year, as safe-haven support has accounted for a 21/2 cent gain during the past three sessions. The March Swiss is likely to maintain this sharp rally through the rest of the session, but it may see a pullback toward the 106.20 level if this upward momentum runs out of steam.

POUND: The March Pound failed to build on overnight strength, and has turned sharply around to the downside during the past few hours. End-of-year market liquidity may be a likely culprit, but it has been recent UK economic data which has pushed the March Pound down towards the lower end of this recent sell off. The March Pound is likely to find support near the 154.00 level again, but in these thin markets another test of the recent lows later today would not be out of the question.

CANADIAN DOLLAR: The March Canadian remains close to the recent highs for the move, but has once again been reluctant to make an upside breakout. Commodity prices have lost some of their initial steam this morning, but the March Canadian should continue to be well supported even during these thin market conditions. The March Canadian may drift towards support near the 99.50 level this morning, but a broad-based commodity rally could trigger a retest of this week’s highs for the move.

TODAY’S MARKET IDEAS: The Dollar is likely to start the morning under some pressure, but decent US economic data could help to lift prices back into positive territory. The March Canadian could make an upside breakout if commodity prices become strong again during today’s session.

Currency Market Commentary – 2010.10.25

by on October 25, 2010

Below is a sample of our Daily Commentary. To get this comment, and our daily coverage of 15 additional markets and trade ideas, visit futures-research.com for your free 2 week trial!

DOLLAR: The Dollar has made a strong move lower to start the week, with the market clearly taking the results of this weekend’s G20 finance meeting as a green light for further depreciation. While the US did not achieve their goal for limits on current account balances, the deal to give emerging nations more of a voice at the IMF may have come with a price of allowing their currencies to gain on the Dollar. There were some vocal objections to the Dollar’s slide in value by several major nations, which could have an impact on the initial size for quantitative measures expected to be announced by the Fed next week. The most recent Commitment of Traders report indicated that non-Commercial traders had shifted to a net long Dollar position as of last Tuesday, but that may not last long with this week’s sharp decline. The Dollar may find support near the 77.65 level this morning, but it needs to have a dramatic change in sentiment to avoid a retest of this month’s lows. The Commitments of Traders Futures and Options report as of October 19th for US Dollar showed Non-Commercial traders were net long 3,126 contracts, an increase of 4,541 contracts which represents a change from a net short to net long position. The Commercial traders were net short 4,019 contracts, an increase of 5,594 contracts which represents a change from a net long to net short position. The Non-reportable traders were net long 893 contracts, an increase of 1,052 contracts which represents a change from a net short to net long position. Non-Commercial and Non-reportable combined traders held a net long position of 4,019 contracts. These traders have gone from a net short to a net long position.

EURO: The December Euro has seen a surge higher this morning, once again being one of the main beneficiaries of the Dollar’s slide. A strong Euro zone Industrial Orders number has added to today’s strength, but the market remains underpinned by ideas that the Euro zone will hold their monetary policy relatively tight, while the US begins another round of quantitative easing. The most recent Commitment of Traders reports showed that non-Commercial traders were building onto a net-long position, which is likely to continue with the market moving back above the 140.00 level. The December Euro may find resistance near the 140.80 level again today, but appears likely to consolidate these gains until Dollar sentiment starts to improve again. The Commitments of Traders Futures and Options report as of October 19th for Euro showed Non-Commercial traders were net long 45,044 contracts, an increase of 6,089 contracts. The Commercial traders were net short 59,458 contracts, an increase of 16,152 contracts. The Non-reportable traders were net long 14,415 contracts, an increase of 10,064 contracts. Non-Commercial and Non-reportable combined traders held a net long position of 59,459 contracts. This represents an increase of 16,153 contracts in the net long position held by these traders.

YEN: The December Yen has surged up to new 15-year highs, with the market showing little fear of provoking a new round of currency invention from the Bank of Japan. Stronger Japanese trade numbers, in spite of the rising value of the Yen may have provided enough additional support for the upside breakout. Now that the December Yen is within striking distance of all time highs, there may be more incentive for the Bank of Japan to step back into the market. For now, the broad-based Dollar weakness should keep the December Yen well supported through today’s session. The December Yen may find resistance near the 124.50 level today, but it is likely to hold gains above the recent highs.

SWISS: The December Swiss has recovered from last Friday’s breakdown, but gains have lagged behind other currencies this morning. There may be some loss of safe-haven support in the wake of the G20 meeting, as well as cross-spreading pressure against the Euro. The December Swiss could find resistance near the 103.75 level today, but it may have trouble moving back towards the recent highs.

POUND: The December Pound has been unable to lift away from the recent lows, although finding some support from the Dollar’s nosedive. The recent announcement of austerity budget cuts has done little to change market opinion that the UK will see their own set of quantitative easing measures ahead. The December Pound may test resistance near the 157.75 area, but could be vulnerable to a sharp sell off if the Dollar regains some strength.

CANADIAN DOLLAR: The Dec Canadian has surged higher this morning, finding large amounts of support from a broad-based commodity rally. Decent Canadian economic data should underpin this rally, with a further move back to the 100.00 level a strong possibility. The Dec Canadian should find initial resistance near the 98.65 level this morning, but a larger move to the upside may be developing.

TODAY’S MARKET IDEAS: The Dollar is likely to remain under heavy pressure this morning, and will need a drastic change in sentiment in order to make any sort of rebound today. The Dec Canadian appears likely to ride a broad-based commodity rally back towards the 100.00 level.

Currency Market Commentary – 2010.08.04

by on August 4, 2010

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DOLLAR: The Dollar has been able to put the brakes on the recent slide, and has moved away from the recent lows. Sentiment for the Dollar has shown little improvement overall, so this recovery may be due more to a profit-taking move out of European currencies than to a change in trend. US economic numbers have weighted on the Dollar recently, generally being weak but not bad enough to provide a risk shock to the US equity markets. As long as most of the market headlines are being generated here instead of overseas, the Dollar is likely to stay on the defensive, with the chances of an extended recovery limited at best. Even so, the Dollar may be able to rally back to the 81.00 resistance level this morning, as long as there are no surprises from this morning’s US ISM Non manufacturing data.

EURO: The September Euro has lost upward momentum today, and drifted back below the 1.32 level. Today’s Euro zone economic numbers may not have been that bad, but they were more than enough to slow down this current rally. With most of the market’s attention on the US lately, the September Euro may need another risk flare-up or some seriously negative economic news in order to derail the longer-term up move pattern. While a descent towards the 1.3170 level may occur during today’s session, any further move below that area may be difficult without fresh concerning news out of Europe.

YEN: The September Yen continues to be the main beneficiary of the Dollar’s protracted weakness, and is now within striking distance of new 15-year highs. While safe-haven support has underpinned this move higher, there seems to be few fundamental reasons from the Japanese economy to justify this sort of currency rally. With a large portion of their economy tied to exports, it should be no surprise that there is concern from both the Japanese government and the Bank of Japan over the strength of this move. Today’s up move will likely hold during the rest of the session, but the chance for a sharp downside reversal are increasing by the day.

SWISS: Although fairly close to a new high for the move, the September Swiss appears to have lost upside momentum this morning and has begun to drift lower. Look for the September Swiss to continue moving lower this morning, but the Swiss should find support near the 95.75 level as this uptrend should remain intact.

POUND: The September Pound has remained near the top end of the recent rally, but has come under mild pressure from a private survey of UK service industries. Look for the September Pound to find strong support near the 1.59 area as another new high for this rally may occur later on today.

CANADIAN DOLLAR: The Sept Canadian has been able to hold above the 97.00 level, but has been sluggish in extending this move higher. Unless there is another risk flare-up, however, the Sept Canadian should find support near the 97.30 area, as this rally appears to have more strength than other recent up moves over the past few months.

TODAY’S MARKET IDEAS: While the Dollar has held its ground this morning, sentiment has shown little change so any potential for extensive gains may be limited at best. Look for the September Pound to post a new 6-month high later on during today’s session.

Currency Market Commentary – 2010.04.02

by on April 2, 2010

Below is a sample of our Daily Commentary. To get this comment, and our daily coverage of 15 additional markets and trade ideas, visit futures-research.com for your free 2 week trial!

DOLLAR: Although trading has been quiet so far, the Dollar has drifted higher this morning in anticipation of today’s U.S. Employment numbers. Much of that support has come from profit-taking in front of today’s numbers, with only the Yen following through with its current trend and making a new 10-month low overnight. A strong non Farm payroll number this morning is likely to cause broad-based Dollar strength, particularly against the Yen where economic conditions remain relatively weak. On the other hand, any sort of negative surprise with either the Non-Farm number or the Unemployment rate could trigger a selloff, with the Euro, Pound and Canadian likely to be the main beneficiaries. Although prices have fallen away from last week’s highs, the Dollar has only moved back towards the high end of its trading range from early February to late March. Whether it remains there could depend on how this morning’s numbers are received by a thin, pre-holiday market.

EURO: The June Euro has remained close to the high end of its recent rally off of last week’s lows, but profit-taking has caused it to slide lower going into this morning. With the recent positive tone of Euro-Zone economic numbers, and with the E.U. sovereign debt crisis fading towards the background, prices have been able to recover from their recent lows. This could change very quickly if we have a strong non Farm Payroll number, as the June Euro could head back to this week’s lows in a hurry.

YEN: The June Yen continued to head lower overnight as it produced a new 10-month low for a fourth day in the row. With deflationary pressure limiting the possibility for growth in Japan, the Yen has been particularly weak against the Dollar. While it would take a huge change in sentiment to reverse the current trend, prices may be vulnerable to a sharp short-covering rally if today’s numbers fail to match expectations. However, look the Yen to extend itself to the downside if these numbers are anywhere close to market forecasts.

SWISS: Yesterday’s massive selloff, in which the June Swiss went from 0.9587 to 0.9435 in 10 minutes, has scared the market to such an extent that prices have now found a new trading level well below yesterday’s highs. The rally up to new all-time highs against the Euro appears to have been the final straw for the Swiss National Bank, as it is likely that they finally made good on their earlier threats of intervention. With this activity taking precedence with the June Swiss, any reaction to today’s Employment numbers is likely to be muted.

POUND: This week’s rally in the Pound seems to have run out of steam, as profit-taking in front of today’s numbers appears to have prevented a test of last month’s highs. With the upcoming U.K. elections taking more of the market’s focus away from recently positive economic numbers, trading could get choppy and two-sided over the near future. However, weak Employment numbers on this side of the Atlantic today have the opportunity to lift the Pound well above its recent trading range.

CANADIAN DOLLAR: Surprisingly enough, it has been the June Canadian which has been the weakest currency against the Dollar so far this morning, as a move to new highs seems to have derailed by overnight profit-taking in front of today’s Employment numbers. With the strong correlation of the U.S. and Canadian economies, a stronger than expected Non-Farm Payroll number has the potential to send the June Canadian up beyond last month’s highs and close to parity with the U.S. Dollar.

TODAY’S MARKET IDEAS: Given the uncertainty over today’s Employment numbers, along with the illiquidity of pre-holiday markets, traders should lean towards using option strategies ahead of futures in order to limit their risk.

Currency Market Commentary – 2010.02.17

by on February 17, 2010

Below is a sample of our Daily Commentary. To get this comment, and our daily coverage of 15 additional markets and trade ideas, visit futures-research.com for your free 2 week trial!

DOLLAR: With the US Dollar Index managing a fresh new low for the move overnight, it is clear that the flight to quality concerns in the marketplace are currently minimal. However, we suspect that the Dollar might be poised to see a bit of a lift in the wake of the US Housing Permits release, as that reading is expected to be soft and that reading is sometimes considered a leading indicator for the US housing sector. We are not sure if the US Dollar is poised to react to the shifting political scene in the US and we are also not sure if the Dollar is going to be impacted by talk that China might be taking measures to lower their US debt holdings. However, seeing even a slight tempering of Chinese interest for US Treasuries, in the face of historic supply flow of US debt, can’t be a good thing for the US Dollar in the long run! At least in the near term, we see the prospect of further minor weakness in the Dollar, off a slight improvement in macro economic sentiment, but we really doubt that the overall pattern of strength seen in the US Dollar since the late November low is set to come to an end, especially since the Greece situation is apparently far from being resolved.

EURO: While the Euro technically showed a quasi upside breakout off a steep down trend channel resistance line overnight, the currency quickly failed at that level. With some news stories surfacing on various financial moves inside Spain overnight, we suspect that the fear of additional debt crisis developments in the Euro zone will continue to undermine overall Euro sentiment. We continue to think that rallies back to 137.50 should be considered a selling opportunity in the March Euro, especially if the press manages to dredge up any additional problems with EU membership maneuvers. It is even possible that slack US economic numbers will also manage to weigh on the Euro, as the Euro, Swiss and Pound can hardly afford to see any slower than expected recovery news from the US economy.

YEN: The March Yen continues to derive some measure of support from the 50 day moving average, but it would still seem like the technical bias in the Yen is favoring the downside. We also have to wonder if Toyota troubles are indirectly weighing on the Yen, as the Press seems to be pushing for the Toyota CEO to testify to the US Congress. On the other hand, with a shift in Chinese ownership of US debt, the Japanese have apparently become the largest holder of US government debt and therefore Congress had better tread lightly in their attempt to harangue a foreign corporation. In the near term, we don’t see a definitive downward thrust in the Yen, but we would expect to see a sub 110 Yen trade over the coming trading sessions.

SWISS: With a pattern of lower highs on the charts and ongoing negative internal macro economic sentiment, the bear camp looks to retain an edge in the Swiss. In fact, some press outlets suggested that the SNB was possibly acting to restrain the Swiss from further gains and that would in turn seem to suggest that the 94.00 level in the March Swiss has become some form of fundamental and technical resistance zone. While we don’t see the prospect of an aggressive thrust down in the Swiss, a series of downside moves still looks to be in the cards.

POUND: As we suggested earlier this week, the Pound has managed to benefit from the recent improvement in sentiment. However, without stepwise further improvement in views toward the US economy, we doubt that the Pound will be able to garner that much upward momentum. In fact, with some forces calling for Greece to respond to currency swap charges by the end of the week it is still possible that the Euro zone debt issue will serve to trip up recovery currencies like the Pound. We can’t argue against more minor gains in the Pound this morning but we are just not inclined to call for a sustained upward action in the Pound.

CANADIAN DOLLAR: While the Canadian hasn’t managed to forge a fresh new high for the move today, the bull camp might retain a slight edge. However, a slack UK employment reading, residual Greece currency swap fears and fears that China might be scaling back US debt purchases, are all forces that serve to temper buying interest in the Canadian Dollar. With a more mixed tone in physical commodity markets this morning and only a minor higher opening indication in US equities, that leaves seems to leave the Canadian with a very thin bullish edge. It would also seem like the Canadian is in need of a slight technical balancing after a rather stellar two week rally.

TODAY’S MARKET IDEAS: The Dollar generally remains the leadership currency as Euro zone issues are not being restricted to the back burner.

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