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RJO FuturesCast 8/11/2017 – Currencies

December 24, 2019


Good morning traders, John Caruso coming
to here on August 11th with your currency outlook for the day. First we’ll
take a peek back at last week, non-farm payrolls we did see a much stronger
reading than expected. 209,000 payrolls added versus an expected 180,000. We also
did see the unemployment rate decline one basis point to 4.3% so some strong data on that front. This week we have seen a series of
inflation readings that have come in soft on a year-over-year basis so
inflation continues to be a problem here in the US as well as in Europe. PPI
slowed to 1.9% versus expected 2.0% year-over-year, and CPI
slowed from 1.7% versus an expected 1.8%. That’s one of
the problems, probably the primary reason why the dollar’s having a hard time
getting out of the woods right now. The US dollar’s trading down about 11% year-to-date, so it’s been a rough go for the US dollar year-to-date. Currently trading 9326 down 14. I’m looking at the
dollar from a standpoint of trying to play the trading range. The range that
I’ve kind of mapped out is about 9250 on the low side, to about 95 on
the high side. So you want to manage that trading range if you need to be trading
the dollar here in the near term. So right now trading 9326 we look at possibly becoming bullish from a near term perspective if the market
were to dip back towards 9250. Inversely looking at the Euro 11850 trading up
26 right now. Largely the Euro this week has been bouncing back and
forth between 11750 and 11850. We have seen a global
repricing in the in the currency markets, perhaps it’s because of the recent
dovish rhetoric that we’ve seen out of the US Federal Reserve. Actually
after this week’s inflation readings, we have actually seen the that the
prospects for a December rate hike here in the United States declined to 37%
which the lowest we’ve seen it in quite some time actually for 2017 it’s the
lowest we’ve ever seen it. So that’s probably the main reason why the dollar’s
have a trouble getting out of the woods, however we are starting to see some of
the growth data. I mean we’re seeing very strong earnings
readings come in by the stock markets. I think right now aggregate earnings
growth in the Nasdaq is up roughly 13% for Q2. So very strong data is still
coming in from the the corporate side of things. Taking a look at Europe again as
I mentioned before they’re having problems with inflation over there.
They’re also starting to see some of the economic data that’s rolled in over the
past two three weeks start to slow as well.
European Eurozone PMI, and manufacturing services all slowed in the last reading
and we did see eurozone retail sales slowed in the previous reading as well.
So they’re having some issues over there if you look at their stock market the
German stock market and the French stock market both down approximately 7% since
May. So we’re seeing a correction in Europe from that regard. I’m going to
switch gears here, we’ll go to the Yen and just kind of give you a quick
technical reading on the Yen. Right now we’re signaling
immediate term overbought, right now the markets trading between 91 75 and 92. If we stretch to perhaps 92 I probably look at becoming bearish on the
Yen for a near-term trade. Forex traders, if you’re following the US dollar versus
Yen cross, we’re currently trading about 109 14 so I’d go about 109 to 118 75
before you want to maybe become bullish on that cross just a quick reading on
the chart there. So that’s all I have for you, once again feel free to reach out to
me anytime, I’ll be around all day. Good luck we’ll talk to you next week!

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