Lack of Leadership in Currencies Favors the Yen | RJO Futures

February 17, 2017 8:45AM CST

March Dollar:  While the Us dollar is showing some corrective bounce early this morning we would suggest macroeconomic optimism in the US is likely to deteriorate in the wake of a focus on political contentiousness instead of pro-growth tax reform.  We think the corrective action from this week’s high is significant and telling.  In fact the bull camp needs to see a better than expected leading indicator result to counter veil what appears to be weakening US equity market action and escalation Washington warfare with the media.  It goes without saying the March dollar index this morning has critical pivot point at 10049 with a failure of that level possibly targeting a slide to 10000.

Dollar Index Daily

 

March Euro:    While the March euro is showing initial corrective action today the currency sits impressively above its 48-hour low.  Unfortunately the euro hasn’t derived much in the way of support from partially supportive ECB official dialogue overnight perhaps because euro zone construction output declined for the month of December.  It is also possible that a slight downshift in global economic sentiment holds back the euro because of its fledging recovery status.  Critical support in the March euro this morning comes in at 10644 and to turn the tide back in the favor of the bull camp requires and early bid above 10679.

Euro Index Daily Chart

 

March Yen: While the increase in safe haven/anxiety is modest, the yen appears to remain in a gently upward slope on its charts from this week’s low.  Weakness throughout global equity markets and news of expanding new loans in China might add to the upward tilt in the Yen which may have little in the way of resistance until the 88.93 level.  A Modest supportive issue for the yen this morning is optimistic views from the Japanese prime minister predicting steady progress in the Japanese economy off the Bank of Japan’s monetary easing program.

Yen Daily Chart

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