RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

Dollar: After viewing the three day recovery in the dollar earlier this week, and seeing the failure from the Thursday high, highlights the fact that the dollar remains within a definitive 2017 downtrend pattern.  Just as it may take a much stronger than expected nonfarm payroll reading to undermine equities today, it could also take much stronger than expected US payroll result to evoke even modest gains in the dollar.  In other words, the trend is down unless there is a definitive catalyst to alter that sentiment.  It is possible that some pressure on the dollar will dissipate now that the storm situation is becoming less uncertain.  Downtrend channel resistance today in the September dollar index is seen at 93.23 and a failure to hold 92.19 probably signals a fresh contract low.  In conclusion the bias is down and we must be presented with very strong data to alter their opinion.

Sep ’17 Dollar Index Daily Chart

Sep '17 Dollar Index Daily Chart

Euro:  While the euro is higher to start today, it should probably have forged even more gains considering the favorable sweep of euro zone manufacturing PMI data released overnight.  In fact, Italy, France, Germany, and the euro zone overall readings posted gains in a private manufacturing PMI report sweep.  Holding back the euro are building beliefs that the ECB is poised to intervene against the currency strength in an effort to protect European exports and therefore the euro zone recovery.  However, in the past the threat of intervention in a currency has evoked action that seems to force the central bank in question to act.  In other words, the euro might be expected to streak back above 1.20 to draw out the intervention.  As we suggested in the dollar coverage, it could take a very strong payroll reading to result in more gains in the dollar and therefore it could take a very strong data to prevent more gains in the euro.  Uptrend channel support in the euro today is seen at 1.1847 and resistance isn’t seen until 1.1958.

Sep ’17 Euro Daily Chart

Sep '17 Euro Daily Chart

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Tony Cholly

Senior Market Strategist
Tony majored in Economics at Eastern Illinois University. He performed his thesis on the market price of corn in the market and the factors that affect it. Tony was drawn to futures trading because of the opportunity to have financial gains in an economic environment. He prides himself on working with customers one-on-one and developing a trading strategy based on the client's needs and wants.
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