RJO FuturesCast

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Currencies

Dollar at Risk to Continue Move Lower

Posted 07/06/2018 8:22AM CT | Tyler Herrmann

The US dollar has traded lower this week after failing to hold over the 95 level during last week’s trade. The short-term trend is lower and that looks to continue with trade tensions between China and the US escalating as $34 billion in tariffs on Chinese goods go into effect Friday. Momentum studies are falling from overbought levels which could help push the already falling market lower. Friday’s unemployment numbers came in showing growth with stronger than expected non-farm payrolls which should provide some support. In the September contract a close below 93.88 would accelerate the move lower with 92.95 being the next downside target. Resistance comes in at 94.65 and then 95.25. Support comes in at 94.10 and then at the reversal point of 93.88. Barring a last minute trade deal look for the market to push the dollar lower until the uncertainty in trade disputes lessens.

The euro has seen choppy trade the past couple weeks trading between 1.1608 and 1.1795. The euro recently has seen support from a positive shift in German manufacturing data and the idea that the economy will not be hit as hard as the US as trade uncertainty continues to increase. The euro’s strength comes largely from any weakness in the US economy from Friday’s job report and US/China trade actions with possible tariffs from Europe on US products providing a cap for the euro’s upside potential. Momentum studies increasing though mid-range would support the market on a break of resistance levels. In the September contract resistance is at 1.1832 while support comes in at 1.1680 and then 1.1605.

U.S. Dollar Sep ’18 Daily Chart

US Dollar Sep '18 Daily Chart

 

Euro Sep ’18 Daily Chart

Euro Sep '18 Daily Chart

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Tyler Herrmann

Market Strategist
Tyler attended Kansas State University where he majored in Agricultural Economics. He started his career in the futures industry with an IB in North East Kansas where he worked with farmers and cattleman to hedge their risk in the market and protect profits with a variety of futures and options strategies. Most recently Tyler has joined RJO Futures as a market strategist.
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