RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

The dollar opened today at 96.765 and has tracked lower in trade Friday morning. The dollar is encountering what appears to be significant resistance and should have a difficult time breaching its recent high 97.16 made on March 4th.  The latest Fed announcement was dovish, which is bearish for the dollar. Last year, the Fed was expecting to raise rates multiple times in 2019 and now they’re forecasting rate cuts later in the year. Accelerating “dovishness” is shifting currency markets out of the dollar’s favor, as this morning we observed a lower high as the dollar entered overbought territory. Foreign currencies trade against the dollar, and we are already seeing signs of a bottom in the Japanese yen and the British pound. All of this is in line with the macroeconomic picture. Essentially, investors are reallocating funds into markets that move against the dollar as U.S. interest rates fall on questions pointing towards a decelerating economy. All eyes will be on UK Parliament today and whether they can agree to set a hardline May 22nd date for their exit or “Brexit” from the Eurozone. Any developments that point to a Brexit sooner rather than later we contend will be a net positive for the British pound. Our intermediate to longer term view is to position long the Pound and Yen vs the USD.

British Pound Weekly Chart

British Pound Weekly Chart

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John Caruso

Senior Market Strategist
Follow John on Twitter @JCarusoRJO. John began his career at Wilshire Quinn Capital, a Wealth Management Firm based out of Los Angeles, California. John made his move to the commodity industry at the end of 2005, and began his path at Lind Waldock, at the time the largest retail brokerage division worldwide. John did his undergraduate work at Robert Morris University in Pennsylvania from 1999-2003, where he was a 4 year varsity basketball letterman.  A self-professed “Macro Trader”, John uses a multi-factor fundamental and “quantamental” trading model in distinguishing market cycles based upon the accelerations or decelerations of growth and inflation metrics. His technical and quantitative approach is heavily reliant upon trend and market range analysis via a custom built standard deviation system in helping him make probability-based market decisions. John is an avid reader of all things pertaining to finance, and behavioral economics. Click here to sign-up for John Caruso's Trading Coach Insights. Daily information and insight on all futures marketsin ranging from metals to equities.
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