FX Breakout Monitor: GBPUSD and EURUSD teasing breakouts lower
Head of FX Strategy
Summary: The US dollar is at it again, but at it in slow-motion as it pushes to new local highs in several places without showing much momentum, to the frustration of momentum traders everywhere. Today we focus most on GBPUSD downside risks.
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.
Below is a snapshot of the full list of currency pairs we track for the breakout monitor. Note that EURUSD nominally broke lower yesterday by posting a new 19-day and 49-day low close, although the obvious focus is on the 1.1000 level and a more convincing break. USDCHF also broke higher yesterday and GBPUSD has broken lower as of this writing. Among other USD pairs within the G10, USDCAD is poised right at resistance and NZDUSD is close to an important breakdown level as well – also in the longer term perspective.
We also note the AUDNZD attempt higher into interesting levels locally around 1.0450, although the longer term picture will require a bit more from the pair to mark a larger breakout. In EM, note that while many EM currencies have taken some heart from the strength in risk appetite, USDTRY is having a look at breakout levels to the upside once again and USDSGD has been ripping higher after Singapore’s monetary authority suggested it would allow a weakening outside the normal band.
Today’s Breakout Highlight: GBPUSD
GBPUSD is trading heavily below the 19-day low close today, although the nominal intraday levels of note are bit lower at 1.2941 and 1.2905. If the pair pushes through these levels we could be looking toward the 200-day moving average next as the market feels ill-prepared for the long wait for the trade deal with the EU to take shape – actually the key hurdle for improving business sentiment, more than the December election result.
Latest Market Insights
Quarterly Outlook Q2 2022: The End Game has arrived
- Shocks from covid and the war in Ukraine have forced the global financial and political world to change, but what will the end game be?
Productivity and innovation have never been more importantAs the world economy hits physical limits and central banks tighten their belts, could equities be facing a 10-15% downside?
The great EUR recovery and the difficulty of trading itIf the terrible fog of war hopefully lifts soon, the conditions are promising for the euro to reprice significantly higher.
Tight commodity markets – turbocharged by war and sanctionsWith supply already tight, commodities keep powering on. But will it last for yet another quarter?
Between a rock and a hard placeGeopolitical concerns will add upward price pressures and fears of slower growth, while volatility will remain elevated.
The Great ErosionInflation is everywhere and central banks try to combat it. But will they get it under control in time?
Australian investing: Six considerations amid triple Rs: rising rates, record inflation and likely recessionWhile global financial markets are struggling in an uncertain world, the commodity-heavy Australian ASX index is poised to keep a positive momentum.
Cybersecurity – the rush to catch up with realityWith the invasion of Ukraine, governments and private companies are rushing to reinforce their cyber defenses.