Head of FX Strategy
Summary: A number of US dollar pairs have seen the USD breaking stronger, but in most cases we continue to see a lack of further momentum from these developments, a tiresome continuation of the low volatility environment that has plagued FX for months. Elsewhere, sterling is trying to drum up some momentum on the back of a strong jobs report.
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. Note that several of the recent USD breaks to the upside are showing hesitation after the recent USD strength that saw the greenback closing at new 19-day highs in a few of the USD/G10 small pairs like NZDUSD, USDSEK and USDNOK, although the last of these is holding after the populist Progress Party in Norway’s governing coalition quit the government in protest over the repatriation of the wife and children of an ISIS fighter.
Aside from the ongoing interest in whether this USD attempt to the upside will blossom, we note that the risk-off move from the corona virus outbreak in China has seen little feed-through into FX, although interesting to note the weak precious metals today, especially silver, which is threatening a new 19-day low as copper prices came strongly under pressure overnight (silver is a dual use metal, thus often a tug of war between its association with gold and sometimes divergent developments in copper, with copper mining and silver mining often coming from the same ore sources).
As well, and as we highlight below in GBPJPY, sterling is enjoying a strong bid today on the back of a very strong employment growth number from November and thoughts that the BoE may just hold off from cutting rates next Thursday.
Today’s Breakout Highlight: GBPJPY
GBPJPY is trading not far from the 19-day high close just above 144.00, also the highest daily close for the year, as the strong UK payrolls data today boosted the currency amid hopes on the bulls’ part that the Bank of England may consider holding off on cutting rates next week to see if the UK economy can post a comeback. Note that EURGBP downside breaks aren’t particularly far away either. The originally bearish-looking pump-and-dump over the UK election in December looks less bearish now in the wake of a lack of follow through lower and fairly steady price action in the ensuing several weeks. Still - seeing is believing in this environment of compressed volatility.
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
