Head of FX Strategy
Summary: Among major USD pairs, most have simply seen the USD rejecting recent bearish developments, though AUDUSD and USDJPY are actually close to new momentum breakout levels ahead of the US December jobs report tomorrow.
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. The only USD pair to actually post a new 19-day low has been USDSEK, which did so yesterday, but a number of others, including AUDUSD and USDJPY, are getting close as we look towards tomorrow’s US December jobs data.
The recent JPY strength has turned sharply to weakness as the US-Iran has seen a tremendous spike higher and reversal in global safe haven bond markets. USDJPY is trading very close to the cycle highs here as we discuss below, not just the 19-day highs, which is the case in all of the other USD pairs where the USD is looking higher. Elsewhere, the new lows in the USDMXN today are a testament to the strength in MXN, while EURCHF has curiously sat out the interesting in shorting the lowest yielding currencies and CHF has failed to correlate at all with a struggling JPY. It is clear that EM currencies prefer to celebrate strong risk appetite rather than fretting the strong US dollar.
Today’s Breakout Highlight: USDJPY
USDJPY turned sharply back higher in sympathy with the weakness in global safe haven bonds and could be set for a run above 110.00 if yields continue to rise on solid or better US jobs data with tomorrow’s December jobs report.
The end of the road
Emboldened by surging crude oil prices, Saudi Arabia makes waves on the international stage, as Crown Prince Mohammed bin Salman manages to create a World Champions League, after buying the UEFA Champion League franchise.
As the world embraces GLP-1 obesity wonder drugs, the people next in line to get a prescription stop caring about dieting and exercising, figuring that the drug will later solve all of their weight-related health problems.
With the US budget deficit spiraling above 10% of the GDP, the government is desperate to foster demand for US Treasuries. Under intense pressure from the White House, Congress makes income from government bonds tax-free.
After a criminal group deploys the most deceptive AI deepfake ever seen, generative AI becomes a national security threat. With public distrust soaring, governments crack down with harsh new laws, puncturing the AI hype.
To fix the divergence in the global trade and financial system, the largest deficit countries unite to negotiate new world trade terms. For surplus countries, the reset of the global economic model is a painful adjustment.
As discontent with Biden and Trump rises to fever pitch, Robert F. Kennedy Jr sees his support rising inexorably in the polls. On November 5, Kennedy wins the US presidential election, ushering in a new era in US politics.
Stepping up Japan's economic transformation in 2024, PM Kishida brings in a host of populist policies to boost domestic demand. As the GDP growth rate hits 7%, the BoJ is forced to abandons its yield curve control policy.
As people wake up to how little tax Europe’s billionaires are actually paying, the EU Commission implements a wealth tax of 2%. The tax sends shockwaves through Europe's luxury industry, with luxury giant LVMH plunging 40%.
