RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

Currencies around the world seem to be reversing their trends as economic data continues to surprise markets and global sentiment improves. The dollar opened on Wednesday at 96.730 and has slid lower in morning trade. It appears the USD is falling victim to safe haven liquidation as Chinese GDP figures outperformed and European housing and construction numbers beat forecasts earlier this week. Technically speaking, the dollar continues to make lower highs, and recovery will be difficult in the face of a dovish Fed. However, I am not expecting a landslide in the greenback, as U.S. economic conditions are still looking relatively bright. On a bullish note, the weakening dollar is having positive effects on the euro. Investors are forecasting that the beaten up and belittled European economy has the most to gain from improving sentiment, as euro charts are showing signs of a bottom. The delay in the British exit, in conjunction with positive data, is acting as a catalyst for the improving euro. However, the pound is struggling to keep up. UK inflation has remained below central bank targets and growth in housing prices fell to a six year low. Even though British wage growth reached a new decade high earlier this week, the pound is still entrenched in its recent bear tracks. Looking to the east, safe haven liquidation has affected the yen as well due to improved outlook for the Chinese and European economies. Adding to the downward pressure is that Japanese industrial production was only half of what was expected which signals that Japan’s macro-economy is failing to keep up with the rest of the world. As support in the yen is seen at 89.60, safe haven liquidation may be exhausted and further downward action in the dollar could cause a trend reversal in the yen.

Euro Jun ’19 Daily Chart

Euro FX Jun '19 Daily Chart

Ian Bannon

Ian’s interest in trading began with the stock market after graduating from Purdue University with a degree in Economics and a focus in international business. A natural strength for numbers, trends, and pattern recognition, in conjunction with a curiosity to understand the big picture has enabled a desire to understand market behavior. Ian managed his own stock account before moving into the futures arena because of the wide scope of trade-able sectors and the ample amount of fundamental support behind these larger-scope markets.