FX Breakout Monitor: Big bond yield rise weakens JPY and CHF
Head of FX Strategy
Summary: Today, the recently weak Scandies gave momentum traders a bit of whiplash today with a rally in SEK in the wake of CPI releases from Norway and Sweden today. Most interesting for future breakout developments is potentially the weakening in JPY and CHF as global bond yields have picked up, particularly so today.
The FX Breakout Monitor is back, and it is expanded with "autosignals" that show examples of how to trade new breakouts, defined as new 19-day high or low closes not preceded by a breakout in the same direction in the prior week. Click on the link below for a look at the full PDF of the table overview and the Recent New Breakouts tables. See further below for a couple of chart highlights related to today's monitor.
Today’s Breakout monitor
Sterling pushed to new weak levels but after our snapshot for the Breakout Monitor snapped back higher on a headline - showing the difficulty of trading momentum in a headline-pron market..
Elsewhere, we would point out the weakness in JPY and CHF as global long bond yields have risen quickly today. Should this development quicken in coming sessions, some new momentum could be afoot in key pairs – EURCHF perhaps one of the more interesting as we discuss below. The latest US 30-year T-bond auction is up later today.
Finally, we discussed that the high momentum trades of late have been in the Scandies trading to the weak side, but after today’s slightly hot CPI releases from Norway and Sweden, and the switch in focus to the weakening safe haven currencies, we saw a considerable consolidation, particularly in SEK today.
Today’s Breakout Highlight: EURCHF
EURCHF is an interesting breakout candidate to the upside because of the clarity of the 1.1000 pivot level and the highest daily close near there, which is currently the 19-day high close and in a few sessions will also be the high 49-day close. One of the coincident indicators pointing higher for the pair is the rise in global bond yields today.
Quarterly Outlook Q2 2022
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?
Energy crisis could turn energy stocks into secular winnerWith long-term expected returns for the global energy sector close to 10%, we look at 40 stocks that could be set to cash in.
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.