Head of FX Strategy, Saxo Bank Group
Summary: The status of the USD looks pivotal in the wake of the FOMC meeting later today as eye bigger breakout levels. As well, the hit to many commodities prices from the coronavirus outbreak is applying pressure to the AUD in particularly within G10 FX, but also in several EM currencies.
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. Ahead of the FOMC meeting later today, we continue to see the US dollar near or at new highs in most USD pairs outside of USDJPY. Especially pivotal over the next couple of sessions are GBPUSD (note that a Bank of England meeting tomorrow with market heavily divided on whether Carney cuts), and EURUSD, where the 1.1000 area represents a major pivot level and the first look at a new 49-day low if we see a close below that level today or in coming days. Elsewhere, note the pattern across EM, where some of the more China- exposed currencies like SGD and THB have been etching new lows versus the US dollar, while AUD is breaking own in recent session versus even the relatively weak EUR.
Today’s Breakout Highlight: EURUSD
EURUSD is trading at its 49-day breakout level - the 1.1000 area - which is conveniently also a clear pivot level on the charts, having been the big-round figure low on two occasions late last year. This as we have a look at the FOMC meeting tonight and the US dollar doesnt seem to react much, at least in this pair, to the waxing and waning of risk appetite and Fed rate projections. The most recent ECB was a disappointment in failing to signal much policy dynamism for the foreseeable future from the ECB and waiting for EU fiscal signals seems akin to waiting for Godot. So, if the Fed fails to clear what appears a high bar for triggering USD weakness here, the risk points lower on a break and close south of 1.1000 for a run toward the ultimate cycle lows just below 1.0900.
The market is trying to get back to the pre-Covid and pre-war times, but that model is broken. A new dawn is here and the financial world needs to adapt.
Steen Jakobsen,
Chief Investment Officer
A political switch in China towards less tough control of its people and companies may kick things back into gear.
Redmond Wong,
Market Strategist
While the economic situation in Europe may not be as bad as feared, there's still a plethora of things to fix.
Chris Dembik,
Head of Macroeconomic Research
As the world turns increasingly bipolar, equity markets face harsh times as they transition into the new reality.
Peter Garnry,
Head of Equity Strategy
New alliances and collaborations outside of China may lead to prosperous times in Asia.
Charu Chanana,
Market Strategist
For years, it was thought that the balanced portfolio was a thing of the past. But recent developments may have changed that.
Peter Siks,
Investment Coach
Following a dramatic and volatile 2022 with good returns, a lot of this year's commodity performance may be driven by Chinese politics.
Ole S. Hansen,
Head of Commodity Strategy
2023 could be a tough year for currencies but EUR and JPY may have some upside.
John J. Hardy,
Head of FX Strategy
The commodity-heavy Australian market may have a good start to 2023, as the Chinese focus on growth signals demand for Aussie resources.
Jessica Amir,
Market Strategist
From a near-perfect environment for speculative assets before 2022 to the opposite, crypto faces fundamental challenges.
Mads Eberhardt,
Cryptocurrency Analyst
Disclaimer
The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website. This content is not intended to and does not change or expand on the execution-only service. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.
Please read our disclaimers:
- Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)
- Full disclaimer (https://www.home.saxo/en-gb/legal/disclaimer/saxo-disclaimer)
