FX Rundown

FX Rundown

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Euro (December)

Session close:Gained 9.5 ticks

Fundamentals:There was no data out of the Eurozone this morning but ECB Board Member Coeure said he expects the ECB to drop its pledge to purchase bonds until inflation hits its 2% target. We know he is a hawk and though these comments do not come as a surprise, they are powerful nonetheless. Merkel is said to give parties three weeks to form a coalition. It was also reported today that the U.K and EU will formalize their separationin three weeks. Chicago Fed National Activity and Existing Home Sales in the U.S were better than expected but the Dollar lost the ground it gained yesterday against all major currencies. Fed Chair Janet Yellen speakstonightat5:00 pm CT. Another quiet day on the data fronttomorrowfor Europe but Durable Goods in the U.S is due at7:30 am CTand the FOMC Minutes in the afternoon.

Technicals:Price action tested and bounced from major three-star support, trading to a low of 1.1728. Given the technical move on todays session and the lack of concern in the immediate-term for German politics we are now reinvigorating our bullishness with though still cautious with a Neutral/Bullish stance. First resistance comes in at 1.1787 though we are more closely watching 1.1804-1.1806 which includes the 50 and 100 day moving averages as well as the 50% retracement; a close back above here will put the bulls back into the drivers seat. The bears must achieve a close back below major three-star support in order to encourage further selling.

Bias:Neutral/Bullish

Resistance 1.1804-1.1806**, 1.1866-1.18815**, 1.1921-1.1934***, 1.1991*, 1.2019**

Support 1.1705-1.1730***, 1.1694**, 1.1650**, 1.15785*, 1.1481-1.15***

Yen (December)

Session close:Gained 17.5 ticks

Fundamentals:The Yen drifted higher today despite a strong session for global equities. The yield curve has flattened at an exceptional pace for the last few weeks and continued to do so strongly through today. The prices of the short end 2s and 5s finished in the red while the 30s were in the green. This type of action is usually indicative to a risk off-trade though the equities are showing no such sign. However, we believe this has been supportive to the Yen and has allowed it to hold ground very well despite new all-time highs in equities.

Technicals:We discussed the significance of the .8865 level yesterday and today price action never dipped below yesterdays low of .8881 (holding by a tick). This has laid solid ground work for the bull camp to step back in and make a second run at major three-star resistance at .8971-.8980. Traders must continue to watch .8865.

Bias:Bullish

Resistance - .8928**, .8971-.8990***, .9018**, .9045***

Support - .8865**, .8800-.8828***, .8755-.8764**, .8639**, .8427***

Aussie (December)

Session close:Gained 37 ticks

Fundamentals:Prices reversed quite sharply on the session following comments from RBA Governor Lowe that they would ultimately be more compelled to raise rates than cut them. He blamed employers for low wage growth and used this as a primary reason why they have no intent of actually raising rates. Though inflation remains low, home prices are inflated, and this would keep the RBA from any type of easing despite poor data. Construction data is due outtonightat6:30 pm CT.

Technicals:Price action ran stops belowFridayslow by three ticks before reversing. It feels as if pessimism is at a height and this should open the door for a clear bounce from oversold territory. First minor resistance comes in at .7605-.7607 while we will watch .7622-.7630 more closely and a close above here will begin to neutralize weakness. The 200-day moving average comes in at .7678 and this will also be a crucial level to watch going forward.

Bias:Bullish/Neutral

Resistance - .7605-.7607**, .7622-.7630**, .7678***, .7726-.7755***, .7824**, .7891-.7893***

Support - .7530-.7550**, .7390****

Canadian (December)

Session close:Gained 20.5 ticks on the session

Fundamentals:Todays movement was supported by a weaker Dollar and stronger Crude Oil which regained the $57 mark. Janet Yellen speakstonightat5:00 pm CTand NAFTA talks have hit an impasse. No data out of Canadatomorrowbut Crude inventories will be important to the trade and Retail Sales is dueThursday.

Technicals:We sound like a broken record, repeating each day how healthy the consolidation lower has been. Todays session traded to a new low at major three-star support at .7790-.7803 before reversing and taking out yesterdays high. The bulls are now in the drivers seat.

Bias:Bullish

Resistance .7851-.7856**, .7897**, .7954***, .8019-.8035**, .8293****

Support - .7790-.7803***, .7727-.7745**, .7671**, 7550***

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Futures trading involves substantial risk of loss and may not be suitable for all investors. Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results.