RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

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Transcript for: Daily Market Update – Currency Futures – 8/11/2017

Good morning traders, John Caruso coming to you here on August 11th with your currency outlook for the day. First we’ll take a peek back at last week, non-farm payrolls we did see a much stronger reading than expected. 209,000 payrolls added versus an expected 180,000. We also did see the unemployment rate decline one basis point to 4.3% so some strong data on that front.


U.S. Dollar

This week we have seen a series of inflation readings that have come in soft on a year-over-year basis so inflation continues to be a problem here in the US as well as in Europe. PPI slowed to 1.9% versus expected 2.0% year-over-year, and CPI slowed from 1.7% versus an expected 1.8%. That’s one of the problems, probably the primary reason why the dollar’s having a hard time getting out of the woods right now. The US dollar’s trading down about 11% year-to-date, so it’s been a rough go for the US dollar year-to-date. Currently trading 9326 down 14. I’m looking at the dollar from a standpoint of trying to play the trading range. The range that I’ve kind of mapped out is about 9250 on the low side, to about 95 on the high side. So you want to manage that trading range if you need to be trading the dollar here in the near term. So right now trading 9326 we look at possibly becoming bullish from a near term perspective if the market were to dip back towards 9250.



Inversely looking at the Euro 11850 trading up 26 right now. Largely the Euro this week has been bouncing back and forth between 11750 and 11850. We have seen a global repricing in the in the currency markets, perhaps it’s because of the recent dovish rhetoric that we’ve seen out of the US Federal Reserve.  Actually after this week’s inflation readings, we have actually seen the that the prospects for a December rate hike here in the United States declined to 37% which the lowest we’ve seen it in quite some time actually for 2017 it’s the lowest we’ve ever seen it. So that’s probably the main reason why the dollar’s having trouble getting out of the woods, however we are starting to see some of the growth data. I mean we’re seeing very strong earnings readings come in by the stock markets. I think right now aggregate earnings growth in the Nasdaq is up roughly 13% for Q2. So very strong data is still coming in from the corporate side of things. Taking a look at Europe again as I mentioned before they’re having problems with inflation over there. They’re also starting to see some of the economic data that’s rolled in over the past two three weeks start to slow as well. European Eurozone PMI, and manufacturing services all slowed in the last reading and we did see Eurozone retail sales slowed in the previous reading as well. So they’re having some issues over there if you look at their stock market the German stock market and the French stock market both down approximately 7% since May. So we’re seeing a correction in Europe from that regard.


Japanese Yen

I’m going to switch gears here, we’ll go to the Yen and just kind of give you a quick technical reading on the Yen. Right now we’re signaling immediate term overbought, right now the markets trading between 91 75 and 92. If we stretch to perhaps 92 I probably look at becoming bearish on the Yen for a near-term trade. Forex traders, if you’re following the US dollar versus Yen cross, we’re currently trading about 109 14 so I’d go about 109 to 118 75 before you want to maybe become bullish on that cross just a quick reading on the chart there.


So that’s all I have for you, once again feel free to reach out to me anytime, I’ll be around all day. Good luck we’ll talk to you next week!

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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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