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June 1, 2018 | Positioning/Data Due Out/Chart View (AUD, EUR, 10-yr Note vs. $ Index)

Jack has over 20 years experience in the currency, equity, and futures arena. He is an investment advisor who has held key positions in brokerage, money management, trading, and research. Jack is founder and president of Black Swan Capital LLC. He was also founder of Ross International Asset Management (specializing in global stock, bond, and currency asset management for retail clients) and General Manager of Plexus Trading (specializing in currency futures and commodities trading).

Position Link

 A slew of data due out today, including non-farm payrolls which bond traders (10-year chart and comments below) will likely react to, if not the currency guys…

060118 due out.png

AUD/USD 240-min view:  Our risk on this trade is 0.7510; the 61.8% retrace is 0.7519; today’s first pivot support comes in at 0.7527–needless to say we need to see Aussie turn in here or we will be stopped out.  Seems an appropriate place for a move higher and a rally in minor (c) of [c] toward our 0.7700 target.  We shall see.

060118 aud 240.png

EUR/USD 240-min: Seems decent price action relative to the news here.  Despite the turmoil across Europe (Italy and Spain specifically) the seems well supported.  However, near-term resistance is 1.1730 and the pair turned down from that level yesterday.  So, we need to see a push through 1.1730 to have more confidence in our view.

060118 eur 240.png

10-year Note Futures versus US$ Index Daily: What is interesting here is the fact that higher yields (seen as lower 10-yr Note prices) have correlated to a “falling dollar.”  It appears the bond spike we have seen is a bit extended.  So, if bonds fall on non-farm payroll this morning (yields rise), and this correlation holds, it would mean a weaker dollar.  This is why it has been so difficult for many moons to link fundamental analysis to currency trading; the traditional guide post of yield spread has not seemed to matter for a long time now.  That may change.  But hasn’t yet.

060118 dollar index and 10 yr.png

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June 1st, 2018

Posted In: Black Swan Currency Currents

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