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A very tough environment for breakout traders here as we await for the near-term fate of the threatened China tariff announcements on Friday. The pattern of JPY strength has largely persisted, though the price action in risk-correlated assets remains choppy and nervous as we await whatever Friday will bring us. An exclusive story today from Reuters
made a bit of a splash as it detailed the degree to which China's response to a draft agreement was seen as a full reversal by the US side.
Elsewhere, the USD is a tad stronger on the day against EUR, but not a standout mover. One of the bigger movers today was sterling, which has weakened on the risk-off and perhaps on renewed sense that Brexit is going nowhere in a hurry; GBPUSD is back close to the pivotal 1.3000 area.
NZD was unable to sustain a sell-off today as while the RBNZ did cut rates, its guidance was rather positive and only suggested 50/50 odds of another 25 basis point chop through Q3 of next year.
NOK is breaking down ahead of tomorrow’s Norges Bank, a development we discuss below. Breakout signal tracker
No change in our open positions as we await Friday’s outcome – we are sympathetic to anyone looking to remove all risk until early next week. EM trades like USDRUB are stunningly quiet, given the nervous backdrop.