Head of FX Strategy
Summary: The weak euro theme continues and sterling and yen have seen fresh surges on the day that are taking various crosses into breakout mode, while the US dollar has a bit more work to break higher against the smaller currencies and select EM currencies. Meanwhile, gold deserve plenty of our attention in breaking higher across the board against G10 FX lately, in many cases to all-time highs.
Today’s Breakout monitor
The FX Breakout Monitor is a concise PDF overview of all current and recent price breakouts for the short and medium term for major FX pairs and spot silver and gold.
A PDF of today’s Breakout Monitor
Below is a snapshot of the full list of currency pairs we track for the breakout monitor. The Euro downside breakouts continued today as EURUSD, EURJPY and EURCHF have all traded to new local lows. Elsewhere, we note that sterling remains on the move and has recently broken higher versus the CHF and EUR and is looking higher against the latter (EURGBP looking a new post-2016 low close) today again.
The currency most worth paying attention to on the day is gold – which, while still just shy of the recent intraday cycle highs versus the US dollar and well shy of the 2011 high water mark, has been breaking to new all time highs elsewhere lately, against the JPY and EUR, for example, just to name two prominent examples.
Today’s Breakout Highlight: XAUUSD
Gold is on the move today as spot gold versus the US dollar trades close to 1600 dollars again while the precious metals has reached new all-time highs against other currencies recently, including against the EUR and JPY today. While the pair is shy of the intraday high posted over the Iran-US hostilities that broke out at the very beginning of the year, it hasn’t closed as high as the current level as of the below snapshot in nearly 7 years (early 2013) and looks ready for more here on a strong close.
AI: The good, the bad, and the bubble
While a deep recession may not be iminent thanks to central bank policy, interest rates will have to stay high for longer, and this will be accompanied by volatility risk from the unwinding of bubbles, especially within AI.
Steen Jakobsen,
Chief Investment Officer
The emergence of advanced AI systems is by far the most surprising event this year, turning everything upside down, while risks and benefits are debated. AI will also become an arms race between the US and China.
Peter Garnry,
Head of Equity Strategy
As China navigates global fragmentation, its cycle of technology application, productivity enhancement, and growth is threatened by US breakthroughs in generative AI, limited computing power, and geopolitical tensions.
Redmond Wong,
Market Strategist
Japan’s expertise in semiconductors and robotic integration could be the foundation of AI dominance. Combining two of this year's themes, Japanese equities and artificial intelligence, brings a wave of opportunities.
Charu Chanana,
Market Strategist
The AI fever has turned the technology into a darling, pushing crypto further into no-man’s-land. There are striking similarities between AI and crypto, and if these are to come full circle, AI won't be spared for bubbles.
Mads Eberhardt,
Cryptocurrency Analyst
Stocks related to artificial intelligence (AI) have appeared on investors' radars. Expectations are high, but it may be necessary to consider how to get exposure to AI in a diversified way.
Hans Oudshoorn,
Trainer Academy
The USD is on its back foot as markets celebrate an eventual Fed rate peak and steady long US yields. The stakes are even higher for the Japanese yen if longer major sovereign yield curves have to price in economic acceleration.
John J. Hardy,
Head of FX Strategy
While commodities, broadly speaking, have faced some tough months, a partial reversal during June could signal that the asset class is getting back on its feet with energy holding up and precious metals with upside potential.
Ole S. Hansen,
Head of Commodity Strategy
As inflation remains high central banks face hard decisions about whether they should keep hiking interest rates or stop. Meanwhile, the rise of AI creates bubble-like conditions that only make the decision harder.
Althea Spinozzi,
Senior Fixed Income Strategist
