RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

Obviously, President Trump’s trade war with China is taking the spotlight this week and has been the primary mover of the currency markets. The USD bull camp is facing some discouragement that the dollar has been replaced by the yen as the safe-haven currency during global economic uncertainty. This morning’s CPI number adds to ‘bearishness’ in the dollar. A minor down tick from 0.4% to 0.3% in m/m inflation gives reason to believe that the Fed will look to take dovish measures to stimulate inflation going forward. Technically speaking, support in the June dollar will likely be seen around the 97 level, but I believe the dollar is in a topping process, as foreign currencies begin to bottom.

 Motivated by U.S./China trade tensions, the June yen has vivaciously moved out of its recent consolidation pattern and marched forward to position itself in a new bull trend. It has advanced into immediate-term overbought territory with first support being seen at 91.14 and below there at 90.96. The euro too has been elevated this week in the face of a weaker dollar, although less extensively. Given weak data coming out of the euro zone, a downgrade in growth expectations for 2019, and an increase in the Italian budget deficit, the euro seems to be the most vulnerable if global anxiety remains in place. Additionally, the British pound seems to be discounting negative scheduled data, as lows are being held this week around the 1.30 level. Although it is still entrenched in bear tracks, the pound is showing relative strength compared to the euro from a technical perspective. If foreign currencies continue to move higher into the summer, the pound could have the most to gain as its chart would suggest. For now, support is seen at 1.3008 in the pound while resistance should be observed at 1.3066.

British Pound Jun ’19 Daily Chart

British Pound 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.