RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

Global currencies are making ambitious moves Friday morning as a wave of bullish sentiment is priced into the economy. Most notably, expectations for China have improved as Chinese exports in March jumped an impressive 21.3%. This news in conjunction with additional “bottoming” signs in emerging market economies is deflating some of the safe haven appeal to the USD, as it dropped over 40 points in morning trade and hit a new 12 day low. I believe this may be the beginning of the end for the dollar, as its recent high is lower than the previous and it appears to be in a topping formation. It is also our view that domestic growth is likely to continue to slow year over year from its cycle peak seen in Q3 2018 which will also continue to weigh on the dollar as real interest rates may continue to decline. This should be a positive for other global currencies, as they trade against the dollar.

This morning, the British pound opened at 1.3096 and has ranged up to 1.3165 in morning trade, while the gains in the euro are even more substantial. From a fundamental standpoint, these currencies could benefit from the British exit being delayed until October, which lessens the odds of a no-deal exit. The June pound is seeing local resistance at this level, but a breach above it could cause a run up to 132.10. Should the dollar continue weakening on slower US growth and further dovish Fed reports, the pound and the euro are likely to continue climbing. In contrast to European currencies, the yen has washed out this morning, deepening bear tracks on safe haven liquidation as economic outlook elsewhere increase.

British Pound Jun ’19 Daily Chart

British Pound Jun '19 Daily 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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