RJO FuturesCast

Daily Futures Market News, Commentary, & Insight


Yesterday’s accelerated break below 01-Sep’s 1.2340 low reaffirms our bearish count discussed in that day’s Technical Blog and leaves yesterday’s 1.2416 high in its wake as the latest smaller-degree corrective high this market is now minimally required to recoup to defer or threaten the bear.  In this regard 1.2416 becomes our new short-term risk parameter to a still-advised bearish policy and exposure for shorter-term traders with tighter risk profiles.  Former 1.2340-area support is considered new near-term resistance ahead of further and possibly steep, even relentless losses straight away.

Canada Dollar 240 min Chart

Canada Dollar Daily Chart

Only a glance at the daily (above) and weekly (below) charts is needed to see that the trend is down on all scales with commensurately larger-degree strength above 31-Aug’s 1.2664 next larger-degree corrective high and key long-term risk parameter required to break this trend and expose a major correction higher.  But given the market’s accelerated decline below huge former 1.24-handle-area support that now is an equally huge new resistance candidate, we do not suspect this market will get anywhere near the 1.26-handle.

In the for-what-it’s-worth department the resumed downtrend from 05-May’s 1.3794 high will equal Jan-May’16’s initial 1.4691 – 1.2460 decline in length (i.e. 1.000 progression) around the 1.1565-area.

The weekly chart below also shows historically high levels if bullish sentiment accorded the CAD contract that, in recent past, has warned of and accompanied major tops in the CAD and bottoms in the USDCAD.  Traders are reminded however that sentiment is not an applicable technical tool in the absence of a confirmed bullish divergence in momentum needed to break the clear and present downtrend.  Currently this would required a recovery above 1.2664.

Canada Dollar Weekly Chart

Finally, the monthly log scale chart below shows the past couple months’ resumption of a major correction or reversal of the entire Jul’11 – Jan’16 rally from 0.9405 to 1.4691.  The market has indeed broken to an area that is totally devoid of any technical levels below it.  In effect, there is no support to hold the USD up so further and possibly steep losses should not surprise.  The ONLY levels of any technical pertinence currently only exist ABOVE the market in the forms of former 1.2340-area support-turned-resistance and prior corrective highs like 1.2416 and 1.2664.  And until or unless the market recoups these levels, further and potentially steep losses remain expected.

In sum, a full and aggressive bearish policy remains advised with strength above at least 1.2416 required to defer or threaten this call and warrant defensive steps.  The market’s downside potential is indeterminable and potentially severe with a run at the 1.15-handle a distinct possibility.

Canada Dollar Monthly Chart



Euro Index 240 min Chart


In just a quick update on the Euro…the 240-min chart above shows the market holding new support from former resistance in the 1.18-handle-area as discussed in 28-Aug’s Technical Blog.  As a result of this week’s recovery, we believe 31-Aug’s 1.1823 low serves as the end or lower boundary to the suspected correction from 29-Aug’s 1.2070 high ahead of the resumption of this year’s major uptrend to new highs above 1.2070.  Per such 1.1823 is considered our new short-term risk parameter from which shorter-term traders can objectively rebase and manage the risk of a still-advised bullish policy.  17-Aug’s 1.1662 next larger-degree corrective low remains as our key long-term risk parameter the market needs to break to break this year’s major uptrend and expose an extensive correction lower.

In sum, a bullish policy and exposure remain advised with a failure below 1.1823 and/or 1.1662 required to threaten and then negate this call.  In lieu of such weakness further gains remain anticipated with the 1.20-to-1.21-handle area still considered a key resistance candidate on a very long-term scale.

Euro Index Daily Chart

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