Temporary Knee-Jerk Reversal Action Should Be in USD And Yen

August 16, 2018 9:17AM CDT

With the Turkish lira and euro snapping back overnight off a combination of hope for negotiations in at least one trade battle, and Qatar promising assistance to Turkey, it would appear as if risk on sentiment is set to remain in place for today’s trading session.  The calm geopolitical front should allow the focus of the currency trade to shift directly onto an extremely active US scheduled report slate this morning.  Unfortunately, the US schedule data set looks to be mixed unless US housing starts and permits data surpasses expectations for minimal expansion.  However, the data from claims and Philly Fed Business Index are expected to be weak and it could be tough to come away from the data with positive USD news.  Resistance comes in at 96.70 and 9695, while first support comes at 96.40 and 96.29

With the Yen from the July lows shifting into a safe haven instrument and the risk off vibe reversed this morning, the path of least resistance shifts down in the yen and a return to 90.30 could be seen.  With the July Japanese Yen trade balance shifting from a surplus into a deficit overnight, one could suggest the Yen is facing more bearish news this morning.

US Dollar Sep '18 Daily Chart

US Dollar Sep '18 Daily Chart

RJO Futures | 222 South Riverside Plaza, Suite 1200 | Chicago, Illinois 60606 | United States
800.441.1616 | 312.373.5478

The risk of trading futures and options can be substantial. Each investor must consider whether this is a suitable investment. Past performance is not indicative of future results. Trading advice is based on information taken from trades and statistical services and other sources that RJO Futures believes to be 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 judgement 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.

This material has been prepared by a sales or trading employee or agent of RJO Futures and is, or is in the nature of, a solicitation. This material is not a research report prepared by RJO Futures Research Department. By accepting this communication, you agree that you are an experienced user of the futures markets, capable of making independent trading decisions, and agree that you are not, and will not, rely solely on this communication in making trading decisions.

Distribution in some jurisdictions may be prohibited or restricted by law. Persons in possession of this communication indirectly should inform themselves about and observe any such prohibition or restrictions. To the extent that you have received this communication indirectly and solicitations are prohibited in your jurisdiction with registration, the market commentary in this communication should not be considered a solicitation.