Today’s Potential New Breakout Signals
With the reversal in price action for most USD pairs late yesterday, we have no new breakout signals of note on yesterday’s closing prices, but we are keeping an eye on the Russian ruble and the Turkish lira for the risk of a breakdown as the ruble was impacted by German demands for answers from Russia’s leadership after German Chancellor Merkel said German medical teams have found that the Russian opposition leader currently undergoing treatment in Germany, was poisoned by the notorious nerve agent novichok. This has USDRUB back towards the highs of the cycle as noted below.
Elsewhere, the breakout potential to the downside in the Swiss franc yesterday has been partially neutralized as EURCHF fell back down below 1.0800 – the USDCHF situation remains a bit more interesting if the greenback follows through higher, but less so than EURUSD if CHF is outperforming the euro in the cross. Stay tuned there. EURCAD managed a new 19-day low close yesterday, although it is back against the prior rally wave and is in a choppy descending channel.
Chart highlight: USDRUB
UDSRUB changed direction in rapid fashion yesterday, popping some 2% higher on the news that German Chancellor Merkel wants answers from the Russian leadership on German evidence that Russian opposition leader Navalny was poisoned by nerve agent novichok. Another RUB-weakening factor in play is the steep sell-off in oil prices. As a side note, Russia has very significant gold holdings and if this sell-off in gold transforms into a deeper rout on further USD strength, the ruble could suffer a triple whammy of headwinds.