Today’s Trade: Sell Euro Currency Futures as the Dollar Heats Up on China Tariff Relief

Jim Wyckoff Barchart Tue May 13, 9:19AM CDT
Piles of Euro notes_ Image by Mixa74 via Shutterstock_

September Euro currency futures (E6U25) present a selling opportunity on more price weakness. 

See on the daily bar chart for the September Euro currency futures that prices are trending lower and early this week hit a four-week low. See, too, that the shorter-term moving averages I follow (9- and 18-day) are in a bearish posture as the red 9-day is below the green 18-day and both lines are trending down.

Fundamentally, the U.S.-China trade war is starting to thaw following the weekend trade talks between the two nations that produced positive results and a 90-day delay in most trade tariffs against each other. That’s more bullish for the U.S. dollar index ($DXY) than it is for the Euro currency. Also, U.S. economic data recently has been mostly upbeat. And this week, marketplace odds of the Federal Reserve cutting interest rates in June dropped significantly. That’s also greenback-bullish.

A price move in the September Euro currency futures below chart support at this week’s low of 1.1158 would become a selling opportunity. The downside price objective would 1.0600, or below. Technical resistance, for which to place a protective buy stop just above, is located at 1.1400.

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IMPORTANT NOTE: I am not a futures broker and do not manage any trading accounts other than my own personal account. It is my goal to point out to you potential trading opportunities. However, it is up to you to: (1) decide when and if you want to initiate any trades and (2) determine the size of any trades you may initiate. Any trades I discuss are hypothetical in nature.

Here is what the Commodity Futures Trading Commission (CFTC) has said about futures trading (and I agree 100%): 

Trading commodity futures and options is not for everyone. IT IS A VOLATILE, COMPLEX AND RISKY BUSINESS. Before you invest any money in futures or options contracts, you should consider your financial experience, goals and financial resources, and know how much you can afford to lose above and beyond your initial payment to a broker. You should understand commodity futures and options contracts and your obligations in entering into those contracts. You should understand your exposure to risk and other aspects of trading by thoroughly reviewing the risk disclosure documents your broker is required to give you. 


On the date of publication, Jim Wyckoff did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.